Laughter is a fundamental communicative signal in our relations with other people and is used to convey a diverse repertoire of social and emotional information. It is therefore potentially a useful probe of impaired socio-emotional signal processing in neurodegenerative diseases. Here we investigated the cognitive and affective processing of laughter in forty-seven patients representing all major syndromes of frontotemporal dementia, a disease spectrum characterised by severe socio-emotional dysfunction (twenty-two with behavioural variant frontotemporal dementia, twelve with semantic variant primary progressive aphasia, thirteen with nonfluent-agrammatic variant primary progressive aphasia), in relation to fifteen patients with typical amnestic Alzheimer's disease and twenty healthy age-matched individuals. We assessed cognitive labelling (identification) and valence rating (affective evaluation) of samples of spontaneous (mirthful and hostile) and volitional (posed) laughter versus two auditory control conditions (a synthetic laughter-like stimulus and spoken numbers). Neuroanatomical associations of laughter processing were assessed using voxel-based morphometry of patients' brain MR images. While all dementia syndromes were associated with impaired identification of laughter subtypes relative to healthy controls, this was significantly more severe overall in frontotemporal dementia than in Alzheimer's disease and particularly in the behavioural and semantic variants, which also showed abnormal affective evaluation of laughter. Over the patient cohort, laughter identification accuracy was correlated with measures of daily-life socio-emotional functioning. Certain striking syndromic signatures emerged, including enhanced liking for hostile laughter in behavioural variant frontotemporal dementia, impaired processing of synthetic laughter in the nonfluent-agrammatic variant (consistent with a generic complex auditory perceptual deficit) and enhanced liking for numbers ('numerophilia') in the semantic variant. Across the patient cohort, overall laughter identification accuracy correlated with regional grey matter in a core network encompassing inferior frontal and cingulo-insular cortices; and more specific correlates of laughter identification accuracy were delineated in cortical regions mediating affective disambiguation (identification of hostile and posed laughter in orbitofrontal cortex) and authenticity (social intent) decoding (identification of mirthful and posed laughter in anteromedial prefrontal cortex) (all p < .05 after correction for multiple voxel-wise comparisons over the whole brain). These findings reveal a rich diversity of cognitive and affective laughter phenotypes in canonical dementia syndromes and suggest that laughter is an informative probe of neural mechanisms underpinning socio-emotional dysfunction in neurodegenerative disease.