This article draws on ethnographic research to analyse the role of humour in the process of collective identity formation within autonomous anti-capitalist groups in Madrid. Autonomous groups embrace the principles of horizontality, openness, diversity, participatory democracy, self-organization, and direct action, so defining themselves in contradistinction to more “vertical” movement organizations of the institutional left. The process of collective-identity formation involves both generating a sense of internal cohesion, and projecting an alternative identity. Autonomous groups in Madrid face a double challenge, for they must integrate ideologically heterogeneous activists, and they must define themselves as being alternatives to the much more consolidated groups of the institutional left. I shall analyse the different ways in which humour is used to address both those challenges: to sustain groups over time, to defuse tensions and try to resolve conflict, for myth-making, and to integrate marginal group members. I will also discuss the role humour plays in charismatic leadership and its use in the projection of an alternative political identity in direct actions. Finally, I will discuss the contested nature of humour as a political tool in the context of the Madrid network.