Spoken language processing in noisy environments, a hallmark of the human brain, is subject to age-related decline, even when peripheral hearing might be intact. The present study examines the cortical cerebral hemodynamics (measured by fMRI) associated with such processing in the aging brain. Younger and older subjects identified single words in quiet and in two multi-talker babble noise conditions (SNR 20 and -5dB). Behaviorally, older and younger subjects did not show significant differences in the first two conditions but older adults performed less accurately in the SNR -5 condition. The fMRI results showed reduced activation in the auditory cortex but an increase in working memory and attention-related cortical areas (prefrontal and precuneus regions) in older subjects, especially in the SNR -5 condition. Increased cortical activities in general cognitive regions were positively correlated with behavioral performance in older listeners, suggestive of a compensatory strategy. Furthermore, inter-regional correlation revealed that while younger subjects showed a more streamlined cortical network of auditory regions in response to spoken word processing in noise, older subjects showed a more diffused network involving frontal and ventral brain regions. These results are consistent with the decline-compensation hypothesis, suggestive of its applicability to the auditory domain.