In animals, noise exposures that produce robust temporary threshold shifts (TTS) can produce immediate damage to afferent synapses and long-term degeneration of low spontaneous rate auditory nerve fibers. This synaptopathic damage has been shown to correlate with reduced auditory brainstem response (ABR) wave-I amplitudes at suprathreshold levels. The perceptual consequences of this “synaptopathy” remain unknown but have been suggested to include compromised hearing performance in competing background noise. Here, we used a modified startle inhibition paradigm to evaluate whether noise exposures that produce robust TTS and ABR wave-I reduction but not permanent threshold shift (PTS) reduced hearing-in-noise performance. Animals exposed to 109 dB SPL octave band noise showed TTS >30 dB 24-h post noise and modest but persistent ABR wave-I reduction 2 weeks post noise despite full recovery of ABR thresholds. Hearing-in-noise performance was negatively affected by the noise exposure. However, the effect was observed only at the poorest signal to noise ratio and was frequency specific. Although TTS >30 dB 24-h post noise was a predictor of functional deficits, there was no relationship between the degree of ABR wave-I reduction and degree of functional impairment.