Dramatic irony arises when the audience knows something that one or more characters do not. The discrepancy between the two levels of awareness creates tension, humor, or pathos.

In Oedipus Rex the audience understands Oedipus’s true parentage long before he does; every confident step he takes toward the truth deepens the irony. In comedy the same structure produces laughter as characters blunder in ignorance of facts the audience possesses. Thriller and horror films exploit dramatic irony by letting viewers see the danger that the protagonist has not yet noticed.

Dramatic irony differs from verbal irony (saying the opposite of what is meant) and situational irony (a reversal of expectation). It is a structural feature of the relationship between audience and character. The effect depends on the careful release of information: the audience must learn the crucial fact at the right moment and then watch the characters operate without it.

When the spectators hold knowledge that the characters lack, dramatic irony is in force.