In Mexico and Peru, denigrating racial humour about blacks and indigenous populations is prolific, despite the existence of colour-blind national ideologies (which minimize or negate the existence of racism) and social norms that silence various forms of race talk. This article draws on interviews and participant observation from these two countries to analyse the popular uses and interpretations of racial humour, and their consequences for racial ideology. We illustrate how racial humour serves to reproduce Mexican and Peruvian national ideology and reinforces the countries' racialized systems of domination. In this article, we identify three mechanisms involved in this process: ‘going along’ with jokes; framing racial humor as benign; and using laughter to ‘soften’ racism. Taken as a whole, our analysis reveals how racial humour works to maintain colour-blind ideology.