In this paper the problem of verbal humour and irony is approached from a sociolinguistic perspective, starting from the Semantic Script Theory of Humour (Raskin 1985), which establishes that all humour involves a semantic-pragmatic process. Humour should be understood and appreciated shared socio-cultural knowledge; a common code should exist between speaker and recipient. As humour is subjective, this is especially true for the humour of nations, the root of which is hiding in national or ethnic stereotypes, in close relationship with ethnic and national prejudices. All these theoretical issues are put into practice in the analysis of G.B. Shaw’s humour as displayed in Caesar and Cleopatra. Concentrating on the target as one of the knowledge resources, it is concluded that choice of the target person has an effect on the identity of the person uttering the humorous remark.