Habitability refers to the match between the language people employ when using a computer system and the language that the system can accept. In this paper, the concept of "habitability" is explored in relation to the design of dialogues for speech-based systems. Two studies investigating the role of habitability in speech systems for banking applications are reported. The first study employed a speech-driven automated teller machine (ATM), using a visual display to indicate available vocabulary. Users made several distinct types of error with this system, indicating that habitability in speech systems cannot be achieved simply by displaying the input language. The second study employed a speech input/speech output home banking application, in which system constraints were indicated by either a spoken menu of words or a "query-style" prompt (e.g. "what service do you require?"). Between-subjects comparisons of these two conditions confirmed that the "menu-style" dialogue was rated as more habitable than the "query-style". It also led to fewer errors, and was rated as easier to use, suggesting that habitability is a key issue in speech system usability. Comparison with the results of the first study suggests that for speech input, spoken menu prompts may be more habitable than similar menus shown on a visual display. The implications of these results to system design are discussed, and some initial dialogue design recommendations are presented. (C) 2001 Academic Press.