There is ample evidence that recognising words in a non-native language is more difficult than in a native language, even for those with a high proficiency in the non-native language involved, and particularly in the presence of background noise. Why is this the case? To answer this question, this paper provides a systematic review of the literature on non-native spoken-word recognition in the presence of background noise, and posits an updated theory on the effect of background noise on native and non-native spoken-word recognition. The picture that arises is that although spoken-word recognition in the presence of background noise is harder in a non-native language than in one's native language, this difference is not due to a differential effect of background noise on native and non-native listening. Rather, it can be explained by differences in language exposure, which influences the uptake and use of phonetic and contextual information in the speech signal for spoken-word recognition.