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Unilateral hearing loss (UHL) occurs in 25% of cases of congenital sensorineural hearing loss. Due to the unilaterally reduced audibility associated with UHL, everyday demanding listening situations may be disrupted despite normal hearing in one ear. The aim of this study was to quantify acute changes in recognition of speech in spatially separate competing speech and sound localization accuracy, and relate those changes to two levels of temporary induced UHL (UHL30 and UHL43; suffixes denote the average hearing threshold across 0.5, 1, 2, and 4 kHz) for 8 normal-hearing adults. A within-subject repeated-measures design was used (normal binaural conditions, UHL30 and UHL43). The main outcome measures were the threshold for 40% correct speech recognition and the overall variance in sound localization accuracy quantified by an Error Index (0 = perfect performance, 1.0 = random performance). Distinct and statistically significant deterioration in speech recognition (2.0 dB increase in threshold, p < 0.01) and sound localization (Error Index increase of 0.16, p < 0.001) occurred in the UHL30 condition. Speech recognition did not significantly deteriorate further in the UHL43 condition (1.0 dB increase in speech recognition threshold, p > 0.05), while sound localization was additionally impaired (Error Index increase of 0.33, p < 0.01) with an associated large increase in individual variability. Qualitative analyses on a subject-by-subject basis showed that high-frequency audibility was important for speech recognition, while low-frequency audibility was important for horizontal sound localization accuracy. While the data might not be entirely applicable to individuals with long-standing UHL, the results suggest a need for intervention for mild-to-moderate UHL.Simulated unilateral hearing loss has a distinct negative effect on spatial hearing.Low-frequency audibility dominates the impairment in sound localization.High-frequency audibility affects speech recognition in competing speech.Clinical intervention for mild unilateral hearing loss may be needed.