In this study, we explore the role humor plays in the narrated identities of drug dealers, in their negotiation of the threat of formal punishment, and in their cultural membership and authority. By drawing from interview and observation data gathered from 33 active drug dealers residing in St. Louis, Missouri, we find that humor facilitates identity work among illicit drug dealers in several ways. Humor is an important symbolic boundary marker distinguishing dealers from others they consider “stupid” or less circumspect. It also indicates dealers’ identities as “smart” and simultaneously establishes and validates their subcultural authority and membership in the symbolic group of “smart” dealers. Furthermore, drug dealers use denigrating humor in their narratives to distance their former and virtual identities from their present identities. Finally, humor also reduces dealers’ perceptions of the threats posed by police and potential snitches by casting dealers’ present identities and former reactions to the threat of punishment in a positive light. We conclude by discussing implications for narrative criminology, extant humor research, and current understanding of symbolic boundaries, identity work, and deterrence.