Acoustic predictability has been shown to affect auditory stream segregation, while linguistic predictability is known to be an important factor in speech comprehension. We tested the effects of linguistic predictability on auditory stream segregation and target detection by assessing the event-related potentials elicited by targets and distractors in participants presented with two concurrent speech streams. The linguistic cues of predictability varied over four levels. In the three real speech conditions, natural speech was presented with intact phonotactics and sentence prosody: normal speech, word-salad (randomized word order within each sentence), and pseudo-words (randomized syllable order within each sentence). The fourth (control) condition delivered a spectrally rotated version of the normal speech condition. Participants were instructed to attend one stream and respond to the natural cough sounds embedded in it. Coughs were present in both streams, serving as targets in the attended and as distractors in the unattended stream. We expected improved target detection with increasing linguistic predictability. The target-related N2b component's amplitude monotonically increased from the pseudo-word to the word-salad and normal speech condition, while no predictability effects were observed for the P3b amplitude or for behavioral responses. The dissociation between the N2b and P3b/behavioral effect suggests that while linguistic predictability enhanced the process of classifying stimuli as potential targets, this did not affect their detection. Furthermore, the observed nonmonotonic distractor N2 (probably MMN) amplitude increase with increasing linguistic predictability is compatible with the notion that linguistic predictability can modulate auditory stream segregation and/or stream selection.