What speakers mean by it
In current English, funny is the everyday adjective for what makes people laugh: a well-timed remark, a comic scene, a person who can tell a story so that others actually do laugh. It is not the same as fun. A roller coaster can be fun without being funny; a joke is funny when it produces mirth rather than mere pleasure.
The same word also marks what is off. Milk that smells funny is not amusing. A funny feeling is unease. British and Irish speech adds a further shade: to be funny about a subject is to be touchy, ready to take offence. Informal American English can treat getting funny as getting insolent. Desk dictionaries record still more: suspicious or underhanded dealing, a slightly unwell body, even a joke told as a noun and the comic-strip pages of a newspaper, the funnies. Older nautical English used funny for a light, narrow sculling boat, probably a joking transfer of the adjective. None of this arrived as a loan from French or Latin. The adjective was made inside English.
A home-grown adjective
The origin of the word funny is a derivation, not a borrowing. Speakers added the ordinary adjective suffix -y to the noun fun, the same piece that turns smell into smelly and wit into witty. That suffix runs back through Middle English -y and Old English -ig to a Germanic ending meaning, roughly, full of or characterized by. The Oxford English Dictionary analyses the word as formed within English from fun plus that suffix. American Heritage simply marks it as from fun. On the morphology, the sources agree.
They disagree about the first printed date. Oxford’s earliest evidence is from 1739, in a life of the highwayman Richard Turpin. Other standard references date the principal humorous sense to 1756, and some desk dictionaries give a looser window in the 1730s. The gap is about first attestation, not about how the word was built. By the middle of the eighteenth century English had an adjective for what was full of fun.
The noun underneath
Fun itself is younger than it feels. As amusement, diversion, mirthful sport, it is recorded from the 1720s. A generation earlier the noun meant a cheat, a trick, a hoax. That sense sits on a verb fun, attested in the late seventeenth century, meaning to cheat or take someone in. Oxford treats the noun as probably converted from that verb, with evidence from 1699 in a canting dictionary. Samuel Johnson still ranked fun as low slang. The older edge never quite died. To make fun of someone, recorded in the 1730s, is still closer to mockery than to innocent play. Later English keeps the same grain in funny business for deceit and in funny money for counterfeit bills.
Where the verb and noun come from is less settled. Many etymologists take fun as a variant of Middle English fonnen, to make a fool of someone, from fonne, a fool or dupe — the family that also gave modern fond, which once meant foolish before it meant affectionately attached. The chain is plausible and often repeated, but it is not proven. The Middle English Dictionary notes that the older words are spelled with o, never with u, which sits awkwardly beside later fun. A Scandinavian source is sometimes offered for fonne, by comparison with Swedish fånig and fåne and Old Norse fáni for a vain or foolish person, yet even that link is marked as uncertain. A more speculative guess tying the Middle English fool-word to Old English fǣmne, a maiden, is best left aside. The honest stop is here: funny is English fun plus -y; fun is probably converted from a slangy verb of cheating; that verb may be a cousin of fond; the trail fades.
Ha-ha and peculiar
Once the adjective existed, its meaning split. The first solid sense is comic: affording fun, mirth-producing, facetious. By 1806 a second sense is in print: curious, odd, strange, something that causes perplexity rather than laughter. Etymological notes often mark that second use as originally southern American, and older American dictionaries treated it as colloquial. Whether or not the geography is exact, the split is real and durable. Early in the twentieth century speakers had already coined a sorting question, funny ha-ha or funny peculiar, recorded by 1916.
The oddness sense then specialised. Feeling funny can mean feeling unwell. Something funny going on can mean fraud. Funny business is recorded with a deceitful meaning by the late 1880s. Funny farm, slang for a psychiatric hospital from the early 1960s, leans on peculiarity rather than jokes. The comic sense produced its own offspring: the funny-man as a circus or stage clown by the 1850s, and the newspaper funnies as strips.
A small anatomical joke sits between the two. Funny bone, from 1826, names the place at the elbow where the ulnar nerve lies close to the surface. Strike it and the arm tingles in a way that is odd more than hilarious. Commentators have long noticed the extra play with humerus, the bone of the upper arm, and humorous. The name likely rides both the sensation and that wordplay.
German komisch and French drôle show a similar double life, comic and strange, but they are not relatives of funny. They are a reminder that languages often let the laughable and the uncanny share a word, because both break an expected pattern.
The date worth keeping
If one fact is worth carrying away, it is the Turpin date against the usual 1756 label. The adjective was already in English by 1739, built on a noun that had only just climbed from cant for a trick into respectable amusement. Funny did not arrive from abroad. It grew, quickly, out of a slangy little word for a hoax, and then learned to mean both a good joke and a bad smell.