Thats what she said
Derek claimed that he first heard this joke from another friend of his while in middle school in Chicago, Illinois. He said that the joke is used after someone makes a comment that can be turned into a sexual innuendo by saying thats what she said. Derek gave me two examples:
Subject 1: You finished your homework already?
Subject 2: Yeah I finished ten minutes ago
Subject 1: Wow youre quick
Subject 2: Thats what she said.
Subject 1: Are you going to keep practicing for basketball all night?
Subject 2: Of course. Im going to work until it hurts.
Subject 1: Thats what she said.
Derek is not sure where the term originated from but has heard his cousins from New Orleans and Tennessee use the joke as well. Usually the context of this joke is in an informal environment amongst young adults. When the joke is used in a more formal setting, with adults present, none of the adults understand the joke at all.
My own take on this joke is that it had to have originated amongst younger boys, and clearly not girls because the joke consists of she and not he. It also has an adolescent masculine tone of humor to it, further supporting this theory. I also find it a unique and different form of folk joke than classic jokes because of the fact that in order for it to be fully utilized as comical, there needs to be something said that cooperates with the phrase beforehand. This is a fairly untraditional form of a joke but also creates flexibility when using the joke and keeps it original with different pre-comments that lead to the phrase thats what she said.
This folk joke can be seen in the hit NBC show The Office.
The Benihana Christmas. The Office. NBC. New York. 14 Dec. 2006.