This article focuses on the relationship between humor and language acquisition in a bilingual immersion setting. Data stems from picture story narrations by 18 informants taking part in an English immersion program in Germany. The analysis concentrates on instances of laughter and smiling as they appear spontaneously during the child narrations. In an initial step, different categories of laughter are identified and subsequently analyzed with regard to their relation to humor and to (the second) language, respectively. A final step of analysis discusses the functions of these categories within the social interaction of interviewer and child. The results point to young language learners’ use of humor (among other functions) as a mechanism to cope with the linguistic inadequacies of their interlanguage.