I'm a bug on acting, which distinguishes Second City from a lot of other revues. It comes from the character, the behavior, and not from the jokes. I don't think jokes are funny. Humor comes out of character and out of situations the character is in.

This quote is referring to the uniqueness of Second City, which is a revue (an entertainment review) and is emphasizing the importance of character and behavior in creating humor. The quote suggests that jokes are not what make something funny. Instead, it is the character and the situations they are in that create humor. In other words, an actor’s performance is more important than what they are saying. This approach is important to Second City and sets it apart from other revues.