The purpose of this study was to determine to what extent neurophysiological indices of semantic processing (N400) are affected by familiar background music as an adverse listening condition in young adults. This research question was examined using a semantic priming paradigm with sentence materials spoken by a female speaker. The sentential context was considered the prime, and the terminal word was considered the target. After each sentence, subjects indicated whether the terminal word was related or unrelated to the sentence. The N400 waveforms in response to related and unrelated spoken terminal words were compared for music and quiet conditions. For statistical analyses, we created four regions of interest (ROIs) by averaging the mean amplitudes of adjacent electrodes in each region. A significant main effect of background was observed irrespective of ROI. There was an observable difference in the ERP waveform in the related condition, with greater negativity in music than in quiet. This difference was not observed in the unrelated condition. Behaviorally, a significant main effect of relatedness was observed for reaction time. Results of our study suggest that speech processing in the presence of background alters neural activity associated with semantic processing.