Understanding speech in noise (SiN) is a complex task that recruits multiple cortical subsystems. There is a variance in individuals’ ability to understand SiN that cannot be explained by simple hearing profiles, which suggests that central factors may underlie the variance in SiN ability. Characterizing central functions that exhibit individual differences during a SiN task and finding their relative contributions to predicting SiN performance can reveal key neural mechanisms of SiN understanding. Here, we elucidated a few cortical functions involved during a SiN task and their hierarchical relationship using both within- and across-subject approaches. Through our within-subject analysis of source-localized electroencephalography, we demonstrated how acoustic signal-to-noise ratio (SNR) alters neural activities along the auditory-motor pathway, or dorsal stream, of speech perception. In quieter noise, left supramarginal gyrus (SMG, BA40) exhibited dominant activity at an early timing (~300 ms after word onset). In contrast, in louder noise, left inferior frontal gyrus (IFG, BA44) showed dominant activity at a later timing (~700 ms). Further, through an individual differences approach, we showed that listeners show different neural sensitivity to the background noise and target speech, reflected in the amplitude ratio of cortical responses to speech and noise, named as an “internal SNR.” We found the “softer noise” pattern of activity in listeners with better internal SNR, who also performed better. This result implies that how well a listener “unmask” target speech from noise determines the subsequent speech analysis and SiN performance.SignificanceThis study elucidated crucial cortical mechanisms underlying speech-in-noise perception using both within- and across-subject design approaches. We found that cortical auditory evoked responses to speech involved early activation in the temporo-parietal cortex in an easy condition while a hard condition cortical activity involved late activation in the frontal cortex. Importantly, the across-subject analysis showed that pre-speech time cortical activity predicts post-speech time activity, in such a way that good performers with better neural suppression of background noise show cortical activity similar to the pattern observed in the easier condition regardless of given acoustic noise level. This suggests a critical role of pre-lexical sensory gain control processes affecting performance and cognitive load during speech-in-noise perception.