This study investigates speech perception performance in younger and older adults as a function of naturally varying speech rate in conversational speech. In contrast to related research, the present study uses conversational corpus materials, with a natural variation in speech rate, rather than lab-recorded and subsequently artificially time-manipulated stimuli. We set up an eye-tracking study in which participants had to click which of four words on a visual display they detected in a conversation. The research question was whether older adults would be more affected by increased speech rate than younger adults and which auditory, cognitive and linguistic individual listener characteristics would predict the impact of increased speech rate on speech processing. Analysis of the click RTs and the gaze proportions shows that increased speech rate makes sentence processing more difficult for both younger and older listeners. In line with previous results, both hearing level and processing speed are predictors for perception performance in the older adults. In contrast to earlier findings, however, younger adults are more affected by increased speech rates than older adults. Analyses of the gaze proportion data suggest that this discrepancy may relate to different task related strategies for the two age groups. The data also suggest that individual characteristics, rather than age, predict speech processing differences at speech rates encountered in everyday conversational situations.