This study focused on young children's incorrect answers to pragmatically demanding questions. Children with specific language impairment (SLI), including a subgroup with pragmatic language difficulties (PLD) and typically developing children answered questions targeting implicatures, based on a storybook and short verbal scenarios. Ninety-seven children participated in this study: 30 children with SLI of whom 12 had PLD, 32 typically developing children aged 5-6 years and 35 aged 7-11 years. The incorrect answers produced by the children with SLI were similar in their use of context to those of the 5-6 year old, suggesting developmental delay. The children with PLD produced significantly more irrelevant answers than both the language impaired children without PLD and the typically developing groups and had most difficulty when the context was presented solely verbally. Results are discussed in relation to a cognitive theory of communication and the clinical implications.