To advance our understanding of the biological basis of speech-in-noise perception, we investigated the effects of background noise on both subcortical- and cortical-evoked responses, and the relationships between them, in normal hearing young adults. The addition of background noise modulated subcortical and cortical response morphology. In noise, subcortical responses were later, smaller in amplitude and demonstrated decreased neural precision in encoding the speech sound. Cortical responses were also delayed by noise, yet the amplitudes of the major peaks (N1, P2) were affected differently, with N1 increasing and P2 decreasing. Relationships between neural measures and speech-in-noise ability were identified, with earlier subcortical responses, higher subcortical response fidelity and greater cortical N1 response magnitude all relating to better speech-in-noise perception. Furthermore, it was only with the addition of background noise that relationships between subcortical and cortical encoding of speech and the behavioral measures of speech in noise emerged. Results illustrate that human brainstem responses and N1 cortical response amplitude reflect coordinated processes with regards to the perception of speech in noise, thereby acting as a functional index of speech-in-noise perception.