Many real-life situations can be extremely noisy, which makes it difficult to understand what people say. Here, we introduce a novel audiovisual virtual reality experimental platform to study the behavioral and neurophysiological consequences of background noise on processing continuous speech in highly realistic environments. We focus on a context where the ability to understand speech is particularly important: the classroom. Participants ( n = 32) experienced sitting in a virtual reality classroom and were told to pay attention to a virtual teacher giving a lecture. Trials were either quiet or contained background construction noise, emitted from outside the classroom window. Two realistic types of noise were used: continuous drilling and intermittent air hammers. Alongside behavioral outcomes, we measured several neurophysiological metrics, including neural activity (EEG), eye-gaze and skin conductance (galvanic skin response). Our results confirm the detrimental effect of background noise. Construction noise, and particularly intermittent noise, was associated with reduced behavioral performance, reduced neural tracking of the teacher's speech and an increase in skin conductance, although it did not have a significant effect on alpha-band oscillations or eye-gaze patterns. These results demonstrate the neurophysiological costs of learning in noisy environments and emphasize the role of temporal dynamics in speech-in-noise perception. The finding that intermittent noise was more disruptive than continuous noise supports a “habituation” rather than “glimpsing” hypothesis of speech-in-noise processing. These results also underscore the importance of increasing the ecologically relevance of neuroscientific research and considering acoustic, temporal, and semantic features of realistic stimuli as well as the cognitive demands of real-life environments.