Autism is a neurodevelopmental disorder associated with deficits in language and social communication. Behavioural studies indicate abnormal semantic organization in individuals with autism, but little is known about the neural mechanism underlying the processing of language in context. Magnetoencephalography was used to record neural responses in 11 able adults with autism spectrum disorders reading meaningful sentences and sentences ending with a semantically incongruous word (e.g. ‘He sent a photo to the trumpet’). Spatially extended evoked signals at 400 ms (N4) and 750 ms (LPC), as well as synchronized gamma-oscillations, provided clear evidence for specific neuronal processes sensitive to sentence context that differed in individuals with autism compared with typically developing individuals (11 healthy volunteers). Amongst other differences, N4 responses following incongruous words were weaker over left temporal cortices, whereas LPC responses to incongruous words and long-latency gamma-oscillations following congruous words were stronger over central and prefrontal regions in individuals with autism compared with the control group. Also, incongruous words elicited long-lasting gamma-oscillations above 40 Hz in the clinical group, but not in typically developing subjects. These findings may indicate unusual strategies for resolving semantic ambiguity in autism. Moreover, the observed gamma-band responses provide evidence for sustained cortical synchronization across segregated areas in individuals with autism, contrary to claims that a general deficit in either temporal binding or long-range connectivity may explain autism.