The development of digital hearing aids will allow for more sophisticated signal-processing techniques than have previously been implemented in commercially available analog devices. The effects of applying noise reduction or spectral enhancement, for example, must be quantified in a reasonable and consistent manner. Methods for characterizing linear aids using pure tones or stationary broadband noise are no longer sufficient for this task. Indeed, current standard techniques fail to satisfactorily describe the most sophisticated of the currently available analog devices. Techniques for characterizing nonlinear devices must be developed that capture and quantify the abilities of these new processing schemes. This is also important so that the performance differences between alternative processing schemes are readily comparable and understandable by hearing health care specialists. A set of tests is presented that characterizes the performance of DSP aids and the results are related to standard psychoacoustic measures.