Listeners can use prior knowledge to predict the content of noisy speech signals, enhancing perception. However, this process can also elicit misperceptions. For the first time, we employed a prime–probe paradigm and transcranial magnetic stimulation to investigate causal roles for the left and right posterior superior temporal gyri (pSTG) in the perception and misperception of degraded speech. Listeners were presented with spectrotemporally degraded probe sentences preceded by a clear prime. To produce misperceptions, we created partially mismatched pseudo-sentence probes via homophonic nonword transformations (e.g. The little girl was excited to lose her first tooth—Tha fittle girmn wam expited du roos har derst cooth). Compared to a control site (vertex), inhibitory stimulation of the left pSTG selectively disrupted priming of real but not pseudo-sentences. Conversely, inhibitory stimulation of the right pSTG enhanced priming of misperceptions with pseudo-sentences, but did not influence perception of real sentences. These results indicate qualitatively different causal roles for the left and right pSTG in perceiving degraded speech, supporting bilateral models that propose engagement of the right pSTG in sublexical processing.