The present study examined the change in spectral properties of Mandarin vowels and fricatives caused by nonlinear frequency compression (NLFC) used in hearing instruments and how these changes affect the perception of speech sounds in normal-hearing listeners. Speech materials, including a list of Mandarin monosyllables in the form of /dV/ (12 vowels) and /Ca/ (five fricatives), were recorded from 20 normal-hearing, native Mandarin-speaking adults (ten males and ten females). NLFC was based on Phonak SoundRecover algorithms. The speech materials were processed with six different NLFC parameter settings. Detailed acoustic analysis revealed that the high front vowel /i/ and certain compound vowels containing /i/ demonstrated positional deviation in certain processed conditions in comparison to the unprocessed condition. All five fricatives showed acoustic changes in spectral features in all processed conditions. Fourteen Mandarin-speaking, normal-hearing adult listeners performed phoneme recognition with the six NLFC processing conditions. When the cut-off frequency was set relatively low, recognition of /s/ was detrimentally affected, whereas none of the NLFC processing configurations affected the other phonemes. The discrepancy between the considerable acoustic changes and the negligible adverse effects on perceptual outcomes is partially accounted for by the phonology system and phonotactic constraints in Mandarin. (C) 2018 Acoustical Society of America.