Purpose: A relevant aspect of listening is the effort required during speech processing, which can be assessed by pupillometry. Here, we assessed the pupil dilation response of normal-hearing (NH) and hard of hearing (HH) individuals during listening to clear sentences and masked or degraded sentences. We combined this assessment with functional magnetic resonance imaging (fMRI) to investigate the neural correlates of the pupil dilation response. Method: Seventeen NH participants (M[subscript age] = 46 years) were compared to 17 HH participants (M[subscript age] = 45 years) who were individually matched in age and educational level. Participants repeated sentences that were presented clearly, that were distorted, or that were masked. The sentence intelligibility level of masked and distorted sentences was 50% correct. Silent baseline trials were presented as well. Performance measures, pupil dilation responses, and fMRI data were acquired. Results: HH individuals had overall poorer speech reception than the NH participants, but not for noise-vocoded speech. In addition, an interaction effect was observed with smaller pupil dilation responses in HH than in NH listeners for the degraded speech conditions. Hearing impairment was associated with higher activation across conditions in the left superior temporal gyrus, as compared to the silent baseline. However, the region of interest analysis indicated lower activation during degraded speech relative to clear speech in bilateral frontal regions and the insular cortex, for HH compared to NH listeners. Hearing impairment was also associated with a weaker relation between the pupil response and activation in the right inferior frontal gyrus. Overall, degraded speech evoked higher frontal activation than clear speech. Conclusion: Brain areas associated with attentional and cognitive-control processes may be increasingly recruited when speech is degraded and are related to the pupil dilation response, but this relationship is weaker in HH listeners.