We consider the problem of learning real-valued functions from random examples when the function values are corrupted with noise. With mild conditions on independent observation noise, we provide characterizations of the learnability of a real-valued function class in terms of a generalization of the Vapnik-Chervonenkis dimension, the fat-shattering function, introduced by Kearns and Schapire. We show that, given some restrictions on the noise, a function class is learnable in our model if an only if its fat-shattering function is finite. With different (also quite mild) restrictions, satisfied for example by guassion noise, we show that a function class is learnable from polynomially many examples if and only if its fat-shattering function grows polynomially. We prove analogous results in an agnostic setting, where there is no assumption of an underlying function class. (C) 1996 Academic Press. Inc.