Children’s ability to understand speakers with a wide range of dialects and accents is essential for efficient language development and communication in a global society. Here, the impact of regional dialect and foreign-accent variability on children’s speech understanding was evaluated in both quiet and noisy conditions. Five- to seven-year-old children (n = 90) and adults (n = 96) repeated sentences produced by three speakers with different accents—American English, British English, and Japanese-accented English—in quiet or noisy conditions. Adults had no difficulty understanding any speaker in quiet conditions. Their performance declined for the nonnative speaker with a moderate amount of noise; their performance only substantially declined for the British English speaker (i.e., below 93% correct) when their understanding of the American English speaker was also impeded. In contrast, although children showed accurate word recognition for the American and British English speakers in quiet conditions, they had difficulty understanding the nonnative speaker even under ideal listening conditions. With a moderate amount of noise, their perception of British English speech declined substantially and their ability to understand the nonnative speaker was particularly poor. These results suggest that although school-aged children can understand unfamiliar native dialects under ideal listening conditions, their ability to recognize words in these dialects may be highly susceptible to the influence of environmental degradation. Fully adult-like word identification for speakers with unfamiliar accents and dialects may exhibit a protracted developmental trajectory.