The Lie Fairy is a small fairy that comes to little boys and girls who tell 'little white lies'. Her first appearance was in The Imagination Situation.
Powers and Abilities
Flight: She has never been seen walking, Only flying.
Teleportation: She can teleport to little boys and girls who tell little lies.
Fairy Fists: She can produce and shoot out these aura like fists from her hands. This attack seems to have no effect at all as when she used it against Yang, he simply ignored it. However in the title screen in The Truth Hurts, it showed these fists did quite a lot, where Yang running away from them, and one hitting Yin making her jump in pain.