Laughing Clowns, sometimes written as The Laughing Clowns, were a post-punk band formed in Sydney in 1979. In five years, the band released three LPs, three EPs, and various singles and compilations. Laughing Clowns' sound is free jazz, bluegrass and krautrock influenced. The band formed to accommodate Ed Kuepper's growing interest in expanding brass-driven elements he had brought to The Saints' third album, Prehistoric Sounds, and by adopting flattened fifth notes in a rock and roll setting while using a modern jazz styled band line-up.

Along with The Birthday Party, The Go-Betweens, The Moodists and The Triffids, the Laughing Clowns also spent extended periods in Europe during the early 1980s, and gained an international cult status. All four aforementioned groups have cited Laughing Clowns as an influence at some point in their respective careers.

Laughing Clowns was formed in April 1979 in Sydney as a rock, soul, avant-jazz group by Bob Farrell on saxophone, Ed Kuepper on lead guitar and lead vocals (ex-Kid Galahad and the Eternals, The Saints), Ben Wallace-Crabbe on bass guitar, and Jeffrey Wegener on drums (ex-The Saints, Last Words, Young Charlatans). In late 1978 Kuepper had quit punk rock band, The Saints, in London – where they had relocated from Brisbane – due to a rift with fellow founder, Chris Bailey regarding future direction . Kuepper preferred "less commercial, more cerebral material" as seen on the band's third album, Prehistoric Sounds (October 1978).

When Kuepper returned to Australia in 1978 he had contemplated retirement from music, however he reconnected with two old school friends, Farrell and Wegener, at a party and they coaxed him into forming a new band. Both Farrell and Wegener had associations with The Saints: Wegener was an early member in 1975 and Farrell had been one of the Flat Top Four, which performed backing vocals on "Kissin' Cousins" for that band's debut album, (I'm) Stranded (February 1977). Ben Wallace-Crabbe had played in a Melbourne band, The Love, with Wegener, and completed the initial line-up. A proposed single by The Saints, "Laughing Clowns" / "On the Waterfront", through EG Records was not recorded by that group due to the difference of opinion between Kuepper and Bailey. Each song appeared elsewhere: "On the Waterfront" on The Saints' first post-Kuepper EP, Paralytic Tonight, Dublin Tomorrow (March 1980) and "Laughing Clowns" provided Kuepper's new band's name and was included on their self-titled six-track mini-album in May that year.

Laughing Clowns made their public debut in August 1979, immediately encountering both confusion and antipathy from some of The Saints' fans who expected a more abrasive punk sound. Australian musicologist, Ian McFarlane, noted that "Part of the problem was that the band's sound defied categorisation. Having to overcome such ludicrous labels as 'jazz-punk' ... [it] was diverse yet moody, at turns melodic or dissonant. It ranged from rock and soul to avant-jazz". The Saints' Prehistoric Sounds had only recently received a local release via EMI, so Laughing Clowns performed various tracks from that album in their early sets – including "The Prisoner", "Swing for the Crime", "Everything's Fine" and "Church of Indifference". Later in the year, Ben's cousin and former guitarist in the Melbourne-based version of Crime & the City Solution as well as The Love, Dan Wallace-Crabbe, joined the group on piano.

This five-piece incarnation recorded Laughing Clowns at Richmond Recorders in Melbourne with production by Kuepper, and engineering by Tony Cohen. All six tracks were written by Kuepper. Released via Missing Link, it gained favourable reviews in the Australian independent music press. McFarlane opined that the EP was "unlike any other [record] made in Australia to that point. The music's only parallel lay in latter-day Saints as a logical progression from Prehistoric Sounds, but at the same time it was a departure, a foray into new territory. The open-ended song arrangements were stirring and provocative, but also disconcerting. The production values were cavernous and echoey; a fascinating sound, but very cold and detached".

A promotional video for one of its tracks, "Holy Joe", was filmed. Upon the EP's release, they expanded to a six-piece group with Peter Doyle on trumpet. This configuration performed at the Paris Theatre in Sydney in November 1980, with The Birthday Party and The Go-Betweens; this was to be the last gig with Farrell. Ben also left the group before the year's end and his cousin, Dan followed within a few months. Ben subsequently formed Upside Down House; he died in 1987.

The group's second release, a three-track EP, Sometimes, the Fire Dance...., appeared on the Prince Melon imprint – a label run by manager, Ken West, and Kuepper - in February 1981. The label name 'Prince Melon' was the nickname the band had for West. This EP had been recorded in mid-June 1980 with the six-piece line-up, again with Cohen engineering, but the whole group produced it. Jonathan Green of The Canberra Times felt the EP had "[s]uper songs, especially the A side, which strikes the odd emotional chord (sob), from one of the most challenging bands in the country. Apparently poppy, with an underlying and sinister atonality".