There is growing evidence that sleep plays a pivotal role on health, cognition and emotional regulation. However, the interplay between sleep and social cognition remains an uncharted research area. In particular, little is known about the impact of sleep deprivation on sarcasm detection, an ability which, once altered, may hamper everyday social interactions. The aim of this study is to determine whether sleep-deprived participants are as able as sleep-rested participants to adopt another perspective in gauging sarcastic statements. At 9am, after a whole night of sleep (n = 15) or a sleep deprivation night (n = 15), participants had to read the description of an event happening to a group of friends. An ambiguous voicemail message left by one of the friends on another's phone was then presented, and participants had to decide whether the recipient would perceive the message as sincere or as sarcastic. Messages were uttered with a neutral intonation and were either: (1) sarcastic from both the participant's and the addressee's perspectives (i.e. both had access to the relevant background knowledge to gauge the message as sarcastic), (2) sarcastic from the participant's but not from the addressee's perspective (i.e. the addressee lacked context knowledge to detect sarcasm) or (3) sincere. A fourth category consisted in messages sarcastic from both the participant's and from the addressee's perspective, uttered with a sarcastic tone. Although sleep-deprived participants were as accurate as sleep-rested participants in interpreting the voice message, they were also slower. Blunted reaction time was not fully explained by generalized cognitive slowing after sleep deprivation; rather, it could reflect a compensatory mechanism supporting normative accuracy level in sarcasm understanding. Introducing prosodic cues compensated for increased processing difficulties in sarcasm detection after sleep deprivation. Our findings support the hypothesis that sleep deprivation might damage the flow of social interactions by slowing perspective-taking processes.