How does the relation between two words create humor? In this article, we investigated the effect of global and local contrast on the humor of word pairs. We capitalized on the existence of psycholinguistic lexical norms by examining violations of expectations set up by typical patterns of English usage (global contrast) and within the local context of the words within the word pairs (local contrast). Global contrast was operationalized as lexical-semantic norms for single-words and local contrast was operationalized as the orthographic, phonological, and semantic distance between the two words in the pair. Through crowdsourced (Study 1) and best-worst (Study 2) ratings of the humor of a large set of word pairs (i.e., compounds), we find evidence of both global and local contrast on compound-word humor. Specifically, we find that humor arises when there is a violation of expectations at the local level, between the individual words that make up the word pair, even after accounting for violations at the global level relative to the entire language. Semantic variables (arousal, dominance, and concreteness) were stronger predictors of word pair humor whereas form-related variables (number of letters, phonemes, and letter frequency) were stronger predictors of single-word humor. Moreover, we also find that semantic dissimilarity increases humor, by defusing the impact of low-valence words--making them seem more amusing--and by enhancing the incongruence of highly imageable pairs of concrete words.