This paper presents the results from two experiments in which normal-hearing and hearing-impaired listeners used an adaptive procedure to select their preferred frequency response slope and two-channel compression ratios in twenty listening conditions. Whereas the preferred response slope mostly depended on the difference in SNR between frequency bands, the preferred output levels in two channels depended highly on the intensity level entering each band. In both cases, subjects preferred less gain in frequency bands where noise was more intrusive and they preferred less gain for listening comfort than for speech understanding. The preferred response slope also depended on the slope of the audiogram. Relative to the prescribed NAL-RP response, the preferred gain variations improved the broadband SNR and hence listening comfort, but not the estimated speech intelligibility index. Overall, the findings confirm the approach used in many commercial products of applying wide dynamic range compression in multiple bands with additional gain reductions in bands where the noise is estimated to be dominant.