Comprehension of insincere communication is an important aspect of social cognition requiring visual perspective taking, emotion reading, and understanding others' thoughts, opinions, and intentions. Someone who is lying intends to hide their insincerity from the listener, while a sarcastic speaker wants the listener to recognize they are speaking insincerely. We investigated whether face-to-face testing of comprehending insincere communication would effectively discriminate among neurodegenerative disease patients with different patterns of real-life social deficits. We examined ability to comprehend lies and sarcasm from a third-person perspective, using contextual cues, in 102 patients with one of four neurodegenerative diseases (behavioral variant frontotemporal dementia [bvFTD], Alzheimer's disease [AD], progressive supranuclear palsy [PSP], and vascular cognitive impairment) and 77 healthy older adults (normal controls--NCs). Participants answered questions about videos depicting social interactions involving deceptive, sarcastic, or sincere speech using The Awareness of Social Inference Test. All subjects equally understood sincere remarks, but bvFTD patients displayed impaired comprehension of lies and sarcasm compared with NCs. In other groups, impairment was not disease-specific but was proportionate to general cognitive impairment. Analysis of the task components revealed that only bvFTD patients were impaired on perspective taking and emotion reading elements and that both bvFTD and PSP patients had impaired ability to represent others' opinions and intentions (i.e., theory of mind). Test performance correlated with informants' ratings of subjects' empathy, perspective taking and neuropsychiatric symptoms in everyday life. Comprehending insincere communication is complex and requires multiple cognitive and emotional processes vulnerable across neurodegenerative diseases. However, bvFTD patients show uniquely focal and severe impairments at every level of theory of mind and emotion reading, leading to an inability to identify obvious examples of deception and sarcasm. This is consistent with studies suggesting this disease targets a specific neural network necessary for perceiving social salience and predicting negative social outcomes.