When the angels told Abraham that Sarah would bear a child, she laughed. "How can I bear a child at my age?" G-d revealed to Abraham that Sarah had laughed in disbelief. Sarah denied, saying, "I did not laugh."
Sfas Emes says that Sarah was a holy person and did not lie. When the Torah says, "Sarah denied," it means that Sarah was in denial, which is not the same as lying.
Sometimes we are unable to accept something about ourselves because it seems so alien to our being that we are certain that it could not possibly have happened. This is unconscious denial, and although it is not willful distortion of fact, it is no less destructive.
We must realize that human frailty is such that we are capable of things that we categorically disown.