Introduction: Natural communication is not only literal, but to a large extent also inferential. For example, sometimes people say "It is hard to give a good presentation" to actually mean "Your talk was a mess!", and listeners need to infer the speaker’s hidden message. In spite of the pervasiveness of this phenomenon in everyday communication, and even though the hidden meaning is often what it’s all about, very little is known about how the brain supports the comprehension of indirect language. What are the neural systems involved in the inferential process , and how are they different from those involved in word- and sentence-level meaning processing? We investigated the neural correlates of this so-called pragmatic inferencing in an fMRI study involving natural spoken dialogue. Methods: As a test case, we focused on the inferences needed to understand indirect replies. 18 native listeners of Dutch listened to dialogues ending in a question-answer (QA) pair. The final and critical utterance, e.g., "It is hard to give a good presentation", had different meanings depending on the dialogue context and the immediately preceding question: (1) Direct reply: Q: "How is it to give a good presentation?" A: "It is hard to give a good presentation" (2) Indirect reply, neutral: Q: "Will you give a presentation at the conference?" (rather than a poster) A: "It is hard to give a good presentation" (3) Indirect reply, face-saving: Q: "Did you like my presentation?" A: "It is hard to give a good presentation" While one of the indirect conditions was neutral, the other involved a socio-emotional aspect, as the reason for indirectness was to 'save one’s face' (as in excuses or polite refusals). Participants were asked to pay attention to the dialogues and, to ensure the latter, occasionally received a comprehension question (on filler items only). No other task demands were imposed. Results: Relative to direct replies in exchanges like (1), the indirect replies in exchanges like (2) and (3) activated brain structures associated with theory of mind and inferencing: right angular gyrus (TPJ), right DM prefrontal / frontal cortex (SMA, ACC). Both types of indirect replies also bilaterally activated the insula, an area known to be involved in empathy and affective processing. Moreover, both types of indirect replies recruited bilateral inferior frontal gyrus, thought to play a role in situation model updating. The comparison between neutral (2) and face-saving (3) indirect replies revealed that the presumed affective load of the face-saving replies activated just one additional area: right inferior frontal gyrus; we did not see any activation in classic affect-related areas. Importantly, we used the same critical sentences in all conditions. Our results can thus not be explained by lexico-semantic or other (e.g. syntactic, word frequency) factors. Conclusions: To extend neurocognitive research on meaning in language beyond the level of straightforward literal utterances, we investigated the neural correlates of pragmatic inferencing in an fMRI study involving indirect replies in natural spoken dialogue. Our findings reveal that the areas used to infer the intended meaning of an implicit message are partly different from the classic language network. Furthermore, the identity of the areas involved is consistent with the idea that inferring hidden meanings requires taking the speaker’s perspective. This confirms the importance of perspective taking in language comprehension, even in a situation where the listener is not the one addressed. Also, as the areas recruited by indirect replies generally do not light up in standard fMRI sentence comprehension paradigms, our study testifies to the importance of studying language understanding in richer contexts in which we can tap aspects of pragmatic processing, beyond the literal code.