Being polite is an effective way to facilitate interpersonal communication. One of the key issues is how the human cognitive system perceives verbal politeness and deals with the cases in which politeness principles are violated. By using event-related potentials (ERPs), we aim to address the nature of real time processing of disrespectful reference in Mandarin utterance interpretation. The consistency between the social status of the communicating partners and the use of second-person pronoun was manipulated as a testing case. Participants read utterances in which the social status of the communicating partners was either consistent with the pronoun (e.g. respectful) or violated the pronoun (e.g. disrespectful), while undergoing the recording of electrophysiological activity on the scalp. Earlier research has demonstrated that semantic, syntactic and inferential pragmatic processing could be manifested in different ERP effects. Our ERP findings demonstrated that successful handling of disrespectful address may engage semantic-pragmatic mechanisms (as reflected by a N400 and late negativity effect), rather than a mechanism dealing with grammatical error. Moreover, the ERP responses were modulated by individual differences in tolerance to the disrespectful usage, gender, and social interactive ability. These ERP indices of real time processing of disrespectful utterances are consistent with the “conventionalization view” in im/politeness theory (Culpeper 2011; Terkourafi 2002, 2003, 2005).