In this paper, the first real-time implementation and perceptual evaluation of a singular value decomposition (SVD)-based optimal filtering technique for noise reduction in a dual microphone behind-the-ear (BTE) hearing aid is presented. This evaluation was carried out for a speech weighted noise and multitalker babble, for single and multiple jammer sound source scenarios. Two basic microphone configurations in the hearing aid were used. The SVD-based optimal filtering technique was compared against an adaptive beamformer, which is known to give significant improvements in speech intelligibility in noisy environment. The optimal filtering technique works without assumptions about a speaker position, unlike the two-stage adaptive beamformer. However this strategy needs a robust voice activity detector (VAD). A method to improve the performance of the VAD was presented and evaluated physically. By connecting the VAD to the output of the noise reduction algorithms, a good discrimination between the speech-and-noise periods and the noise-only periods of the signals was obtained. The perceptual experiments demonstrated that the SVD-based optimal filtering technique could perform as well as the adaptive beamformer in a single noise source scenario, i.e., the ideal scenario for the latter technique, and could outperform the adaptive beamformer in multiple noise source scenarios.