Can they hear him?!

Yes. But I don't think they always listen to him. I will site and example as to why I say yes. In the episode (I forget it's name) where the family is stuck in a safe room, Peter comments that he did not like the Godfather. Eventually it comes out that Peter has never seen the whole movie. Stewie says something to the effect that he can't judge the movie without actually watching it. Lois the declares "I agree with Stewie."

My sister and I ask that question every time we watch an episode. I personally believe that only the dog can hear him because they would have sent their child to therapy if they knew what he was saying right? I mean Stewie has threatened how many lives in the seasons of Family Guy? That's a scary baby.

Well Stewie seems to have whole conversations with the Dog. So that's a definite yes there. But at other times it's always just whichever way it happens to work best. For example if Mom is trying to get him to eat broccoli and he says the most disgusting things to here she just sez something like oh poor stewie must be tired. In movies they have something called continuity but in this cartoon theres no way of being sure which way it will turn. It's always fun to see though and I thoroughly enjoy this show.

Brian the dog can hear Stewie. As for the other characters I think they hear what we hear in real life - babbles. I don't think Lois can hear him talking but can hear him trying to say some thing just like a real mom/ kid.

I know that this has been a while, but now we finally have a definitive answer.


------------------------Here there be SPOILERS!!!!---------------------------

In the episode where Brian finds a love interest, only to lose her to Cleveland, Stewie and Brian decide that the only way that Brian can get her back is to get Loretta and Cleveland back together. The two of them go visit Loretta and at the Door, Stewie wants to do the talking, Brian dissuades him by saying that while Loretta is a fairly main character (yes, I believe that the word used was character) that she was not one of those characters outside the family who could actually understand him, she would only get the gist of what he was saying.

So, the family can all understand what he is saying, some of the other characters can also understand what he is saying, but Most people understand what he means, without really being able to hear the actual words.