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Governments around the world often deny inconvenient or unfavorable information, calling it fake news or false rumor, and yet what was denied often turn out to be true later. How will citizens react when the initial “fake news” is verified to be real? What are the consequences of false government denials on government credibility and citizen satisfaction? With a two-wave survey experiment in China, we find that citizens can be persuaded by the authorities’ denials and reduce belief in a piece of news that has been declared “fake.” But when the denied news turns out to be real, citizens will reduce their belief not only in the denial at hand, but also similar denials in the future, and reduce their satisfaction with the government. Thus, false government denials have both immediate and lasting effects on government credibility, and can erode citizen satisfaction with the government in an authoritarian country.