I In this paper we present algorithms for the interpretation and generation of a kind of particularized conversational implicature occurring in certain indirect replies. Our algorithms make use of discourse expectations, discourse plans, and discourse relations. The algorithms calculate implicatures of discourse units of one or more sentences. Our approach has several advantages. First, by taking discourse relations into account, it can capture a variety of implicatures not handled before. Second, by treating implicatures of discourse units which may consist of more than one sentence, it avoids the limitations of a sentence-at-a-time approach. Third, by making use of properties of discourse which have been used in models of other discourse phenomena, our approach can be integrated with those models. Also, our model permits the same information to be used both in interpretation and generation.