What makes us laugh? One crucial component of many jokes is the disambiguation of words with multiple meanings. In this functional MRI study of normal participants, the neural mechanisms that underlie our experience of getting a joke that depends on the resolution of semantically ambiguous words were explored. Jokes that contained ambiguous words were compared with sentences that contained ambiguous words but were not funny, as well as to matched verbal jokes that did not depend on semantic ambiguity. The results confirm that both the left inferior temporal gyrus and left inferior frontal gyrus are involved in processing the semantic aspects of language comprehension, while a more widespread network that includes both of these regions and the temporoparietal junction bilaterally is involved in processing humorous verbal jokes when compared with matched nonhumorous material. In addition, hearing jokes was associated with increased activity in a network of subcortical regions, including the amygdala, the ventral striatum, and the midbrain, that have been implicated in experiencing positive reward. Moreover, activity in these regions correlated with the subjective ratings of funniness of the presented material. These results allow a more precise account of how the neural and cognitive processes that are involved in ambiguity resolution contribute to the appreciation of jokes that depend on semantic ambiguity.