Across 8 experiments, we demonstrate that humor can influence status, but attempting to use humor is risky. The successful use of humor can increase status in both new and existing relationships, but unsuccessful humor attempts (e.g., inappropriate jokes) can harm status. The relationship between the successful use of humor and status is mediated by perceptions of confidence and competence. The successful use of humor signals confidence and competence, which in turn increases the joke teller’s status. Interestingly, telling both appropriate and inappropriate jokes, regardless of the outcome, signals confidence. Although signaling confidence typically increases status and power, telling inappropriate jokes signals low competence and the combined effect of high confidence and low competence harms status. Rather than conceptualizing humor as a frivolous or ancillary behavior, we argue that humor plays a fundamental role in shaping interpersonal perceptions and hierarchies within groups.