Sarcasm is ubiquitous in organizations. Despite its prevalence, we know surprisingly little about the cognitive experiences of sarcastic expressers and recipients or their behavioral implications. The current research proposes and tests a novel theoretical model in which both the construction and interpretation of sarcasm lead to greater creativity because they activate abstract thinking. Studies 1 and 2 found that both sarcasm expressers and recipients reported more conflict but also demonstrated enhanced creativity following a simulated sarcastic conversation or after recalling a sarcastic exchange. Study 3 demonstrated that sarcasm’s effect on creativity for both parties was mediated by abstract thinking and generalizes across different forms of sarcasm. Finally, Study 4 found that when participants expressed sarcasm toward or received sarcasm from a trusted other, creativity increased but conflict did not. We discuss sarcasm as a double-edged sword: despite its role in instigating conflict, it can also be a catalyst for creativity.