To communicate successfully, listeners must decode both the literal and intended meanings of a speaker’s message. This ability is especially crucial when processing indirect replies as intended meanings can differ significantly from what was said. How native and non-native speakers differ in this ability is an open question. The present study investigated differences in the time course of indirect reply processing in native and non-native Mandarin speakers. EEG signals were recorded while participants were presented with conversations that differed in their directness. For indirect replies, native speakers exhibited a larger left anterior N400 and posterior late positive component (LPC). Conversely, non-native speakers exhibited a larger left-distributed LPC and delayed LPC. Findings support that non-native speakers exhibit delayed processing of indirect replies, potentially because of cognitive resource limitations. Findings from the present study have implications for a broad range of investigations on human communication and second language processing.