Evidence suggests that cognitive performance deteriorates in noisy backgrounds and the problems are more pronounced in older people due to brain deficits and changes. The present study used functional MRI (fMRI) to investigate the neural correlates of this phenomenon during short-term memory using a forward repeat task performed in quiet (STMQ) and in noise: 5-dB SNR (STMN) on four groups of participants of different ages. The performance of short-term memory tasks was measured behaviourally. No significant difference was found across age groups in STMQ. However, older adults (50-65 year olds) performed relatively poorly on the STMN. fMRI results on the laterality index indicate changes in hemispheric laterality in the superior temporal gyrus (STG), Heschl's gyrus (HG), and cerebellum, and a leftward asymmetry in younger participants which changes to a more rightward asymmetry in older participants. The results also indicate that the onset of the laterality shift varies from one brain region to another. STG and HG show a late shift while the cerebellum shows an earlier shift. The results also reveal that noise influences this shifting. Finally, the results support the hypothesis that functional networks that underlie STG, HG, and cerebellum undergo reorganization to compensate for the neural deficit/cognitive decline.