Laughter is a valuable means for communicating and engaging in interaction since the earliest months of life. Nevertheless, there is a dearth of work on how its use develops in early interactions—given its putative reflexive nature, it has often been disregarded from studies on pre-linguistic vocalizations. We provide a longitudinal characterization of laughter use analyzing interactions of 4 babies with their mothers at five time-points (12, 18, 24, 30, and 36 months). We show how child laughter is very distinct from mothers’ (and adults’ generally), in terms of frequency, duration, level of arousal displayed, overlap with speech, and responsiveness to others’ laughter. Notably, contrary to what might be expected, we observed that children laugh significantly less than their mothers, especially at the first time-points analyzed. We indeed observe an increasing developmental trajectory in the production of laughter overall and in the contingent multimodal response to mothers’ laughter, showing the child’s increasing attunement to the social environment, interest in others’ appraisals and mental states, and awareness of its communicative value. We also show how mothers’ contingent responses to child laughter change over time, going from high-frequency mimicry, to a lower rate of diversified multimodal responses, in line with the child’s neuro-psychological development. Our data support a dynamic view of dialogue where interactants influence each other bidirectionally and emphasizes the crucial communicative value of laughter. When language is not fully developed, laughter might be an early means, in its already fully available expressiveness, to hold the conversational turn and enable meaningful vocal contribution in interaction at the same level of the interlocutor. Our study aims to provide a benchmark for typical laughter development, since we believe it can be an early means, along with other commonly analyzed behaviors (e.g., smiling, gazing, pointing, etc.), to gain insight into early child neuro-psychological development.