This article examines verbal humour in routine interactions within professional workplaces, using material recorded in four New Zealand government departments. The problem of defining humour is discussed, followed by a brief outline of the theoretical models which underpin the analysis of the various functions which humour serves in professional organizations. Humour can express positive affect in interaction. It can also facilitate or 'licence' more negative interpersonal communicative intent. While politeness theory can account for the former, as a means of expressing collegiality at work, or de-emphasizing power imbalances, in its standard form politeness theory does not explain barbed, competitive or confrontational humour. For this it is necessary to look to 'the dark side of politeness' (Austin, 1990). An alternative perspective thus examines the extent to which humour functions, especially in unequal encounters, as an acceptable strategy to help superiors maintain a position of power but also as a strategy used by subordinates to licence challenges to the power structures within which they operate, and as a legitimizing strategy in attempts at subverting the repressive or coercive discourse of superiors.