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The presence of noise and interfering information can pose major difficulties during speech perception, particularly for older adults. Analogously, interference from similar representations during retrieval is a major cause of age-related memory failures. To demonstrate a suppression mechanism that underlies such speech and memory difficulties, we tested the hypothesis that interference between targets and competitors is resolved by suppressing competitors, thereby rendering them less intelligible in noise. In a series of experiments using a paradigm adapted from Healey, Hasher, and Campbell (2013), we presented a list of words that included target/competitor pairs of orthographically similar words (e.g., ALLERGY and ANALOGY). After a delay, participants solved fragments (e.g., A_L__GY), some of which resembled both members of the target/competitor pair, but could only be completed by the target. We then assessed the consequence of having successfully resolved this interference by asking participants to identify words in noise, some of which included the rejected competitor words from the previous phase. Consistent with a suppression account of interference resolution, younger adults reliably demonstrated reduced identification accuracy for competitors, indicating that they had effectively rejected, and therefore suppressed, competitors. In contrast, older adults showed a relative increase in accuracy for competitors relative to young adults. Such results suggest that older adults’ reduced ability to suppress these representations resulted in sustained access to lexical traces, subsequently increasing perceptual identification of such items. We discuss these findings within the framework of inhibitory control theory in cognitive aging and its implications for age-related changes in speech perception.