This 21st annual progress report summarizes research activities on speech perception and spoken language processing carried out in the Speech Research Laboratory, Department of Psychology, Indiana University in Bloomington. As with previous reports, the goal is to summarize accomplishments during 1996 and 1997 and make them readily available. Some papers in the report are extended manuscripts that have been prepared for formal publication, others are short reports of research. The extended manuscripts are: "Speech Perception" (R. Wright and others); "Looking at the 'Stars': A First Report on the Intercorrelations among Measures of Speech Perception, Intelligibility and Language Development in Pediatric Cochlear Implant Users" (D.B. Pisoni and others); "Measures of Phonological Memory Span for Sounds Differing in Discriminability: Some Preliminary Findings" (M. Cleary); "Static vs. Dynamic Faces as Retrieval Cues in Recognition of Spoken Words" (L. Lachs); "Some Observations on Working Memory Tasks and Issues in Cognitive Psychology" (W.D. Goh); "Familiarity, Similarity and Memory for Speech Events" (S.M. Sheffert and R.M. Shiffrin); "Improvements in Speech Perception in Prelingually-Deafened Children: Effects of Device, Communication Mode, and Chronological Age" (T.A. Meyer and others); "Predicting Open-Set Spoken Word Recognition Performance from Feature Identification Scores in Pediatric Cochlear Implant Users: A Preliminary Analysis" (S. Frisch and D.B. Pisoni); "Lexical Competition in Spoken English Words" (S. Amano); and "Some Computational Analyses of the PBK Test: Effects of Frequency and Lexical Density on Spoken Word Recognition" (T.A. Meyer and D.B. Pisoni). Among the short reports are "Cognitive Factors and Cochlear Implants: An Overview of the Role of Perception Attention, Learning and Memory in Speech Perception" (D.B. Pisoni); "Performance of Normal-Hearing Children on Open-Set Speech Perception Tests" (M. Kluck and others); "Effects of Talker, Rate and Amplitude Variation on Recognition Memory for Spoken Words" (A.R. Bradlow and others); "Acoustic, Psychometric and Lexical Neighborhood Properties of the Spondaic Words: A Computational Analysis of Speech Discrimination Scores" (T.A. Meyer and others); "Effects of Alcohol on the Production of Words in Context: A First Report" (S.B. Chin and others); "Intelligibility of Normal Speech II: Analysis of Transcription Errors" (A.T. Neel and others); "Some Observations on Neighborhood Statistics of Spoken English Words" (S. Amano); "Sensory Aid and Word Position Effects on Consonant Feature Production by Children with Profound Hearing Impairment" (S.B. Chin and others); "Lexical Competition and Reduction in Speech: A Preliminary Report" (R. Wright); "A Preliminary Acoustic Study of Errors in Speech Production" (S. Frisch and R. Wright); "Experience with Sinewave Speech and the Recognition of Sinewave Voices" (S.M. Sheffert and others); "Some Factors Affecting Recognition of Spoken Words by Normal Hearing Adults" (A.R. Bradlow and others); and "The Hoosier Audiovisual Multi-Talker Database" (S. Sheffert and others). Contains references, data tables, and a publications list. (RS)