Pragmatic communication or discourse was studied in 33 children and adolescents following closed head injury. Three-quarters of the sample was impaired on at least one of four discourse tests (knowing the alternate meanings of ambiguous words in context; getting the point of figurative or metaphoric expressions; bridging the inferential gaps between events in stereotyped social situations; and producing speech acts that express the apparent intentions of others). Resolution of ambiguity was correlated with word fluency and verbal domain knowledge, but not with object naming; understanding of metaphor was correlated with verbal domain knowledge, but not with literal sentence comprehension or with the formation of analogies; making inferences was correlated with working memory capacity but not with social knowledge; and producing speech acts was not correlated either with sentence construction or with social knowledge. These associations and dissociations reveal some of the correlates of impaired discourse processing after closed head injury in childhood and adolescence, as well as bearing on theoretical questions concerning the nature of normally developing discourse processes.