A punch line ("punch-line" or punchline) concludes a joke; it is intended to make people laugh. It is the third and final part of the typical joke structure. It follows the introductory framing of the joke and the narrative which sets up for the punch line.
In a broader sense punch line can also refer to the unexpected and funny conclusion of any performance, situation or story.
The origin of the term is unclear.  Even though the comedic formula using the classic "set-up, premise, punch line" format was well-established in Vaudeville by the beginning of the 20th century, the actual term “punch line” is first documented in the 1920s; the Merriam-Webster dictionary pegs the first use at 1921.
A linguistic interpretation of the mechanics of the punch line / response is posited by Victor Raskin in his Script-based Semantic Theory of Humor. Humor is evoked when a trigger, contained in the punch line, causes the audience to abruptly shift its understanding of the story from the primary (or more obvious) interpretation to a secondary, opposing interpretation. "The punch line is the pivot on which the joke text turns as it signals the shift between the [semantic] scripts necessary to interpret [re-interpret] the joke text." To produce the humor in the verbal joke, the two interpretations (i.e. scripts) need to be both compatible with the joke text AND opposite or incompatible with each other. Thomas R. Shultz, a psychologist, independently expands Raskin’s linguistic theory to include "two stages of incongruity: perception and resolution." He explains that "… incongruity alone is insufficient to account for the structure of humour. […] Within this framework, humour appreciation is conceptualized as a biphasic sequence involving first the discovery of incongruity followed by a resolution of the incongruity." Resolution generates laughter.
Jokes without a punch line
In order to better elucidate the structure and function of the punch line it is useful to look at some joke forms which purposely remove or avoid the punch line in their narrative. Shaggy dog stories are long-winded anti-jokes in which the punch line is deliberately anti-climactic. The humor here lies in fooling the audience into expecting a typical joke with a punch line. Instead they listen and listen to nothing funny, and end up themselves as the butt of the joke.
Another type of anti-joke is the nonsense joke, defined as having “a surprising or incongruous punch line” which provides either no resolution at all, or only a partial, unsatisfactory resolution. One example of this is the No soap radio punch line. Here the anticipated resolution to the joke is absent and the audience becomes the butt of the joke.
Punch lines and Jab lines
A joke contains a single story with a single punch line at the end. In the analysis of longer humorous texts, an expanded model is needed to map the narratological structure. With this in mind, the General Theory of Verbal Humor (GTVH) was expanded to include longer humorous texts together with jokes, using the GTVH narrative structure to categorize them. A new term “jab line” was introduced to designate humor within the body of a text, as opposed to the “punch line” which is always placed at the end. The jab line is functionally identical to the punch line except it can be positioned anywhere within the text, not just at the end. “Jab and punch lines are semantically indistinguishable (…), but they differ at a narratological level.” Additionally, “jab lines are humorous elements fully integrated in the narrative in which they appear (i.e. they do not disrupt the flow of the narrative, because they either are indispensable to the development of the “plot” or of the text, or they are not antagonistic to it)”.
Using the expanded Narrative Structure of the GTVH and this new terminology of jab lines, literature and humor researchers now have a single theoretical framework with which they can analyze and map any kind of verbal humor, including novels, short stories, TV sitcoms, plays, movies as well as jokes. 
- (Carrell 2008, p. 308)
- (Raskin 1985, p. 99)
- (Shultz 1976, pp. 12–13)
- (Carrell 2008, p. 312)
- (Ruch 2008, p. 49)
- (Attardo 2008, p. 110)
- (Attardo 2001, pp. 82-83)
- see also https://books.google.com/books?id=ZT4MBxNnYA8C&pg=PA82&lpg=PA82&dq=jab+lines&source=bl&ots=WHo4ydQlYT&sig=7Ma6QTiosOAL-YUqoDTwJI9Fd8A&hl=en&sa=X&ei=HDSbVeTqBNLWoATGxYDwDA&ved=0CCUQ6AEwAQ#v=onepage&q=jab%20lines&f=false
- For an example of this type of humor text analysis, see >(Attardo 2008, p. 110).
- Attardo, Salvatore (2008). "A primer for the Linguistics of Humor". In Raskin, Victor. Primer of Humor Research: Humor Research 8. Berlin, New York: Mouton de Gruyter. pp. 101–156.
- Attardo, Salvatore (2001). Humorous Texts: A Semantic and Pragmatic Analysis. Berlin, New York: Mouton de Gruyter. p. 83.
- Carrell, Amy (2008). Raskin, Victor, ed. "Primer of Humor Research: Humor Research 8" (PDF). Berlin, New York: Mouton de Gruyter. pp. 303–332.
- Chlopicki, W. (2005). The Linguistic Analysis of Jokes. Journal of Pragmatics.
- Raskin, Victor (1985). Semantic Mechanisms of Humor. Dordrecht, Boston, Lancaster: D. Reidel.
- Ruch, Willibald (2008). "Psychology of humor". In Raskin, Victor. Primer of Humor Research: Humor Research 8. Berlin, New York: Mouton de Gruyter. pp. 17–100.
- Shultz, Thomas R. (1976). "A cognitive-developmental analysis of humour". Humour and Laughter: Theory, Research and Applications (London: John Wiley): 11–36.