Background Patients with age-related hearing loss (ARHL) often struggle with tracking and locating sound sources, but the neural signature associated with these impairments remains unclear.Materials and methods Using a passive listening task with stimuli from five different horizontal directions in functional magnetic resonance imaging, we defined functional regions of interest (ROIs) of the auditory "where" pathway based on the data of previous literatures and young normal hearing listeners (n = 20). Then, we investigated associations of the demographic, cognitive, and behavioral features of sound localization with task-based activation and connectivity of the ROIs in ARHL patients (n = 22).Results We found that the increased high-level region activation, such as the premotor cortex and inferior parietal lobule, was associated with increased localization accuracy and cognitive function. Moreover, increased connectivity between the left planum temporale and left superior frontal gyrus was associated with increased localization accuracy in ARHL. Increased connectivity between right primary auditory cortex and right middle temporal gyrus, right premotor cortex and left anterior cingulate cortex, and right planum temporale and left lingual gyrus in ARHL was associated with decreased localization accuracy. Among the ARHL patients, the task-dependent brain activation and connectivity of certain ROIs were associated with education, hearing loss duration, and cognitive function.Conclusion Consistent with the sensory deprivation hypothesis, in ARHL, sound source identification, which requires advanced processing in the high-level cortex, is impaired, whereas the right-left discrimination, which relies on the primary sensory cortex, is compensated with a tendency to recruit more resources concerning cognition and attention to the auditory sensory cortex. Overall, this study expanded our understanding of the neural mechanisms contributing to sound localization deficits associated with ARHL and may serve as a potential imaging biomarker for investigating and predicting anomalous sound localization.