In daily communication, we sometimes use ironic expressions to convey the opposite meaning. To understand these contradictory statements, we have to infer contextual implications and the speaker's mental state. However, little is known about how our brains carry out these complex processes. In this study, we investigated the neural substrates involved in irony comprehension using echoic utterance (Sperber and Wilson, 1986, 1995). Participants read a short scenario that consisted of five sentences. The first four sentences explained the situation of the protagonists. The fifth connoted either an ironic, literal, or unconnected meaning. The participants had to press a button to indicate whether or not the final sentence expressed irony. In the ironic sentence condition, the bilateral superior frontal gyrus, middle frontal gyrus, inferior frontal gyrus, medial prefrontal cortex, superior temporal gyrus, inferior parietal lobule, caudate, thalamus, the left insula, and amygdala were activated. In the literal sentence condition, the right superior frontal gyrus, the bilateral middle frontal gyrus, inferior frontal gyrus, medial prefrontal cortex, superior temporal gyrus, inferior parietal lobule, caudate, the left insula, the right thalamus, and the left amygdala were activated. However, in the ironic sentence condition minus the literal sentence condition, we observed higher activation in the right medial prefrontal cortex (BA 10), the right precentral (BA 6), and the left superior temporal sulcus (BA 21). Our results suggest that irony comprehension is strongly related to mentalizing processes and that activation in these regions might be affected by higher-order cognitive operations.