Research indicates that using a cell phone to talk or text while maneuvering a vehicle impairs driving performance. However, few published studies directly compare the distracting effects of texting using a hands-free (i.e., speech-based interface) versus handheld cell phone, which is an important issue for legislation, automotive interface design and driving safety training. This study compared the effect of speech-based versus handheld text entries on simulated driving performance by asking participants to perform a car following task while controlling the duration of a secondary text-entry task. Results showed that both speech-based and handheld text entries impaired driving performance relative to the drive-only condition by causing more variation in speed and lane position. Handheld text entry also increased the brake response time and increased variation in headway distance. Text entry using a speech-based cell phone was less detrimental to driving performance than handheld text entry. Nevertheless, the speech-based text entry task still significantly impaired driving compared to the drive-only condition. These results suggest that speech-based text entry disrupts driving, but reduces the level of performance interference compared to text entry with a handheld device. In addition, the difference in the distraction effect caused by speech-based and handheld text entry is not simply due to the difference in task duration.