Wikipedia at deadpan funny.
Islamic humour is a tradition of humour in Islam, dating back to the Islamic prophet Muhammad. (PBUH? – ed.)
Laughter, fun, and joking are permissible in Islam provided guidelines from Quran and Hadith are followed. For humour to be in accordance with Islam, the joke should not insult anyone, should not frighten anyone, should be within the limits of Islamic tolerance, should tell the truth, should not be offensive, should not contain unIslamic material or promote immorality and indecency. (Other than that we’re good to go! Let the laugh-riot begin! – ed.)
1) The Prophet used to smile, rather than laugh….
2) The Prophet’s smile and his companions’ laughing sessions.
Jabir ibn Samurah narrated:
Simak ibn Harb asked Jabir ibn Samurah, “Did you sit in the company of the Messenger of Allah?” He said: Yes, very often. He (the Prophet) used to sit at the place where he observed the morning or dawn prayer till the sun rose or when it had risen; he would stand, and they (his Companions) would talk about matters (pertaining to the days) of ignorance, and they would laugh (on these matters) while (the Prophet) only smiled.— Sahih Muslim, Book 4: Kitab Al-Salat (Book of Prayers), Chapter 92, Hadith Number 1413.