Conventional wisdom from the popular and scholarly literatures consistently suggests that positive humor by leaders can be beneficial, but that negative humor should be avoided at all costs. To explore the boundaries of that conventional wisdom, we draw on leadership and humor theory to develop and test a conceptual model describing the relationships between leader humor, leader–subordinate relationship quality, the subordinate’s tenure with the leader, and subordinate job satisfaction. Analysis of multilevel data from 241 subordinates nested within 70 leaders in 54 organizations revealed that the relationship between leader humor and job satisfaction was dependent on the quality of the leader–subordinate relationship, and not the positive/negative tone of the leader’s humor. Specifically, both positive and negative (i.e., affiliative and aggressive) leader humor styles were positively associated with job satisfaction when the relationship was positive, but both types were negatively associated with job satisfaction when the relationship was negative. Our results also suggested that the effects of positive humor increased with increasing subordinate tenure. We discuss the practical implications of these findings, including the importance of understanding the relational context of humor.