High-level language functioning was assessed in a group of 11 children with severe closed head injury (CHI). Performance was examined on measures of figurative language, oral expression, inferencing, and interpretation of ambiguous sentences, and was compared with that of a control group matched for age, gender, and handedness. The children with CHI demonstrated inferior performance on the oral expression, ambiguous sentences, and figurative language tests; however, performance on the inferencing task appeared intact. These findings are discussed with respect to the underlying nature of the observed impairments. Both linguistic and cognitive factors are considered. It is concluded that a complex interaction of cognitive and linguistic impairments experienced by children with CHI may underlie the performance deficits identified in the current study.