People with multiple sclerosis (pwMS) frequently present with deficits in binaural processing used for sound localization. This study examined spatial release from speech-on-speech masking in pwMS, which involves binaural processing and additional higher level mechanisms underlying streaming, such as spatial attention. 26 pwMS with mild severity (Expanded Disability Status Scale score <3) and 20 age-matched controls listened via headphones to pre-recorded sentences from a standard list presented simultaneously with eight-talker babble. Virtual acoustic techniques were used to simulate sentences originating from 0°, 20°, or 50° on the interaural horizontal plane around the listener whilst babble was presented continuously at 0° azimuth, and participants verbally repeated the target sentence. In a separate task, two simultaneous sentences both containing a colour and number were presented, and participants were required to report the target colour and number. Both competing sentences could originate from 0°, 20°, or 50° on the azimuthal plane. Participants also completed a series of neuropsychological assessments, an auditory questionnaire, and a three-alternative forced-choice task that involved the detection of interaural time differences (ITDs) in noise bursts. Spatial release from masking was observed in both pwMS and controls, as response accuracy in the two speech discrimination tasks improved in the spatially separated conditions (20° and 50°) compared with the co-localised condition. However, pwMS demonstrated significantly less spatial release (18%) than controls (28%) when discriminating colour/number coordinates. At 50° separation, pwMS discriminated significantly fewer coordinates (77%) than controls (89%). In contrast, pwMS had similar performances to controls when sentences were presented in babble, and for the basic ITD discrimination task. Significant correlations between speech discrimination performance and standardized neuropsychological scores were observed across all spatial conditions. Our findings suggest that spatial hearing is likely to be implicated in pwMS, thereby affecting the perception of competing speech originating from various locations.Copyright © 2022 The Authors. Published by Elsevier Ltd.. All rights reserved.