A portable real-time speech processor that implements an acoustic simulation model of a cochlear implant (CI) has been developed on the Apple iPhone / iPod Touch to permit testing and experimentation under extended exposure in real-world environments. This simulator allows for both a variable number of noise band channels and electrode insertion depth. Utilizing this portable CI simulator, we tested perceptual learning in normal hearing listeners by measuring word and sentence comprehension behaviorally before and after 2 weeks of exposure. To evaluate changes in neural activation related to adaptation to transformed speech, fMRI was also conducted. Differences in brain activation after training occurred in the inferior frontal gyrus and areas related to language processing. A 15-20% improvement in word and sentence comprehension of cochlear implant simulated speech was also observed. These results demonstrate the effectiveness of a portable CI simulator as a research tool and provide new information about the physiological changes that accompany perceptual learning of degraded auditory input.