Successful peer relations in older children depend on proficiency with banter, which in turn frequently involves verbal irony. Individual differences in successful irony interpretation have traditionally been attributed to Theory of Mind. Our premise was that the key factor might in fact be cognitive flexibility, the ability to switch between different perspectives (here: on the same utterance). We also wished to extend the focus of previous irony studies, which have almost exclusively examined Simple Irony, where the literal meaning conflicts with (...) observable physical evidence (e.g. ‘great day for a picnic’ when viewing a downpour). Therefore, we also examined how children interpreted more Complex Irony, where listeners must consider at a deeper level the common ground shared with the speakers (e.g. general knowledge / cultural common ground or information about the particular speaker). In Study 1 we found that for six- to eight-year-olds both cognitive flexibility and Theory of Mind contributed unique variance to Simple Irony interpretation, when statistically controlling for non-verbal reasoning and structural language standardised scores. Neither inhibitory control, working memory nor general knowledge correlated with irony interpretation. Six- to eight-year-olds were at floor for Complex Irony. In Study 2 we found that cognitive flexibility contributed unique variance to how ten- to twelve-year-olds interpreted Complex Irony, while controlling for non-verbal reasoning, structural language and specific knowledge required. We are the first to examine the relationship with cognitive flexibility and conclude it must be taken into account when investigating the relationship between Theory of Mind and irony interpretation. (shrink)