Understanding the speech act(s) a sentence conveys requires that a listener follow conversational rules and use clues provided by the sentence and the context in which it is spoken. To trace the development of speech act comprehension in mentally retarded and nonretarded school age children, we examined their responses to sentences such as Would you open the telephone book? and Could you roll the shoebox? These sentences can be intended as questions or as directives. Nonretarded adults follow the "answer obviousness" rule and interpret a sentence of this type as a question if the answer to the question is nonobvious to the speaker, but as a directive if the question has an obvious answer. We manipulated answer obviousness by varying both the context and linguistic properties of the interrogative. Retarded and nonretarded individuals at the nonverbal MAs of 5, 7, and 9 years were studied. Retarded and nonretarded individuals at all MAs followed the answer obviousness rule and used the contextual and linguistic clues available. There were only minor differences between MA-matched retarded and nonretarded subjects despite the fact that the retarded subjects had serious deficits in receptive linguistic competence. The implications for understanding the development of comprehension in retarded persons and for understanding the relations among language, cognition, and communication in general are considered.