This paper considers the satiric mode in the xiaoshuo, a multigeneric category, as well as performance literature such as drama. I argue that satire commonly appears in xiaoshuo, although it may not seem obvious from the types of writings traditionally assigned to the category. In comparison with classical poetry and prose, xiaoshuo and drama frequently feature witty repartee and ludicrous jokes. Within the category of xiaoshuo, chuanqi tales tend to contain more subtle satire. Farces and jokebooks include simple, straightforward satire that highlights various inconsistencies in human behavior and life in general. In comparison, some forms of oral literature and performance, such as jesting, stress the witty and ludicrous types of satire even more. In these genres, the satiric mode helps to criticize shortcomings in society or express dissatisfaction about the times, thereby serving as a sort of safety valve that alleviates social tensions somewhat.