Research conducted under umbrella of functionalist discourse analysis selectively draws on different aspects of cognitive-perceptual, social-behavioral, and psychoanalytical theories of humor and explores what functions humor plays in an interaction. One major contributions of functionalist discourse analytical studies to research on humor in general lies in the insights it provides into how humor is actually done in an interaction. In line with some general aims and objectives, research on humor taking a functionalist discourse perspective is mainly interested in identifying and discussing the functions that humor performs in different social environments, such as workplace, classroom, and among family and friends. Broadly speaking, humor has been categorized into verbal, visual and physical humor, but in line with most research from a functionalist discourse analytical perspective, this chapter focuses on verbal humor. Research under the umbrella of functionalist discourse analysis draws on a range of different discourse analytical frameworks, such as Interactional Sociolinguistics, Conversation Analysis (CA) and Critical Discourse Analysis (CDA).