"I watch a lot of the cable news shows, so I understand that you were never in Vietnam," asked Stewart, host of Comedy Central's "The Daily Show."
"That's what I understand, too, but I'm trying to find out what happened," Kerry joked.
A group of Vietnam veterans has accused Kerry, in public statements and in television commercials, of exaggerating his actions during the war, where he served on a Navy swift boat and earned five medals.
As Kerry launched into one of his lengthy monologues about why President Bush avoids talking about issues like the economy, jobs and the environment, the comedian interrupted.
"I'm sorry," Stewart said. "Were you or were you not in Cambodia?"
Stewart and Kerry then lean in and stare each other down over the comedian's desk before Stewart asks about some of the other things Kerry's opponents are saying about him.
"Are you the number one most liberal senator in the Senate?" he asked, joking about claims that Kerry is "more liberal than Karl Marx, apparently."
"No," Kerry answered.
"Are you or have you ever flip-flopped?" Stewart asked.
"I've flip-flopped, flap-flipped," Kerry said, poking fun at the GOP's label.
Stewart also sought answers to another hard-hitting question: "Is it true that every time I use ketchup, your wife gets a nickel?" The candidate's wife, Teresa Heinz Kerry, is heir to the Heinz food fortune.
"Would that it were," Kerry said.
When the conversation turned serious, Stewart asked Kerry how he would counter Bush's ability in debates to turn issues into a choice between his position and the opposition.
Kerry said the debates would be a challenge. "The president has won every debate he's ever had," Kerry said. "He beat Ann Richards. He beat Al Gore. So, he's a good debater."
Many presidential candidates appeared on late-night comedy shows this year. John Edwards, now Kerry's running mate, even announced on "The Daily Show" that he was a candidate for president — which Kerry said he watched.
"I think that's why he lost," Stewart said.
"No, he won," Kerry insisted, then jokingly offered to hold their inauguration on the show.
Kerry offered an interesting observation on life as a presidential candidate.
"You'd be amazed at the number of people who want to introduce themselves to you in the men's room," he said. "It's the most bizarre part of this entire thing."