BACKGROUND: Better language outcomes are reported for preschool children with hearing impairment (HI) diagnosed very early, irrespective of severity. However, population studies of older children are required to substantiate longer term benefits of early detection. AIMS: To study impact of age of diagnosis and severity of HI in a population cohort of 7-8 year old children. METHODS: Eighty eight 7-8 year old children born in Victoria, who were (a) fitted with hearing aids for congenital HI by 4.5 years and (b) did not have intellectual or major physical disability were studied. Main outcome measures were Clinical Evaluation of Language Fundamentals (CELF) and Peabody Picture Vocabulary Test (PPVT). Predictors were pure tone average (0.5, 1, 2 kHz) in better ear at diagnosis and age at diagnosis. Marginal (adjusted) means were estimated with general linear models. RESULTS: Response rate was 67% (n = 89; 53 boys). Mean age at diagnosis was 21.6 months (SD 14.4); 21% had mild, 34% moderate, 21% severe, and 24% profound HI; mean non-verbal IQ was 104.6 (SD 16.7). Mean total CELF score was 76.7 (SD 21.4) and mean PPVT score 78.1 (SD 18.1). Age of diagnosis, adjusted for severity and IQ, did not contribute to language scores. In contrast, adjusted mean CELF and PPVT language scores fell sequentially with increasing severity of HI. CONCLUSIONS: More severe HI, but not later diagnosis, was strongly related to poorer language outcomes at 7-8 years. Further systematic study is needed to understand why children with hearing impairment have good or poor outcomes.