As it has migrated from gay culture to mainstream entertainment, drag performance has generated considerable controversy among queer theorists. Some theorists argue that drag reinforces binary categories of sex and gender by positioning itself as the boundary-defining Other - as the simulated act that preserves the fantasy of the genuine article. Judith Butler, among others, has countered that drag performance subverts the stability of gender as a social category, bringing into view illusory distinctions between masculine and feminine. In describing a documentary video project on the social psychology of drag performance, this field report takes up the question of what makes drag performance funny, and who or what pays the price of the joke.