Integrating natural observation, interviews, and quantitative analysis, we used a mixed design to compare the socio-linguistic judgments of international Chinese students at a private University on the East Coast of the United States (US) with those of their native English-speaking peers regarding a critical incident involving gossip. Ninety-two participants evaluated alternative sociolinguistic strategies offered in addressing the incident on semantic differential scales. Judgments by each group regarding four alternative responses were surveyed and compared. Twenty participants, ten from each group, participated in semi-structured interviews. Themes were developed through a recursive process: interpretations were validated by a bilingual bicultural expert. Several distinctions in judgments emerged. The most preferred alternative to dealing with a group gossiping about a friend for Americans was to say honestly that it made them uncomfortable while Chinese participants preferred requesting a change in topic. Such contrasts were found to be representative of underlying sociocultural values for each group. Intercultural pragmatic distinctions such as these could lead to pragmatic failure and have the potential to interfere with the development of intercultural friendship among the members of the two groups. Implications for pedagogy and developing cross-cultural insight are offered.