When a speaker restates another person's inaccurate remark, for example, "Sure, Ronald Reagan was president during the 1970's," he or she runs a risk of being misunderstood—people might understand the response as verbal irony, but they also could readily interpret it literally. This study investigated an Ironic Implicature Hypothesis that speakers opt for this form of verbal irony because of the unique pragmatic functions it performs. The hypothesis states that speakers use conversational implicature to suggest that erroneous speakers should not have made the mistake in the first place. Ironic restatement was found to indicate a speaker's belief that another erroneous speaker actually knew the correct statement that was expected (Experiment 1), which, in turn, suggests that the erroneous speaker should not have committed the speech error (Experiment 2). The implications of these findings for theories of verbal irony are discussed.