The purpose of this article is three-fold: to reflect critically on the nature of comedy improvisation as a method of unleashing individual and collaborative creativity, to investigate its application in studio pedagogy as a way of enhancing the design process, and to offer insights into its effectiveness as a pedagogical tool and its implications for urban design practice. While comedy improvisation has been studied and applied in fields such as business and management, there has been no serious attempt to explore its potential as an urban design methodology. Based on the author’s experience as a professional urban designer and extensive training in comedy improvisation, an experimental urban design studio was conducted in Boston for graduate students at Massachusetts Institute of Technology in early 2009. The article highlights the benefits of comedy improvisation such as creative collaboration, fostering innovation, supporting spontaneity, and learning through error; and describes the studio experience of building skills and testing ideas through pedagogical practice. The article concludes with useful insights from comedy improvisation for urban design practice, including building effective design teams as horizontal networks, developing highly creative design processes that are sensitive to constant change, and ways in which design innovation emerges out of specific types of group dynamics. Urban designers require such skills in a field marked by long-term non-linear design processes, interdisciplinary teams and multiple stakeholders with different viewpoints, and considerable ambiguity in decision making.