By Shelley DuBois
December 12, 2012

FORTUNE — “Victoria’s Secret Fashion Show a Hit Among People Who Don’t Know Pornography Exists.” “Oscar Meyer Unveils New Weiner Drone.” The Onion’s headlines are good, very good. The satirical publication is famous for them – they poke fun at the world with an impressive economy of words, says Onion head editor Will Tracy.

Tracy, 29, started as an intern at The Onion in 2006, writing one-liners. He got so good at fake news that he became a staff writer in 2009 and took the reins as the publication’s editor in 2012. He has seen the company through a big move, shifting its headquarters from New York to Chicago this past summer. At the same time, it started pumping out its pretend headlines daily because, just like real news outlets, The Onion needed to stay relevant in the Internet age. Tracy spoke with Fortune about the art of making jokes out of terrible things and why it’s important to subvert traditional media. Here is an edited transcript of the conversation.

Fortune: The news can be so upsetting. How do you make jokes out of terrible things?

Will Tracy: We’re known for being one of the first comedy outlets to respond to something like the shooting in Colorado or even 9/11, and we take pride in it. We are very careful to just relentlessly brainstorm ideas the day of until we get something that feels apt and in some way can even feel cathartic.

Cathartic, how?

It’s trying to walk that line. We always try to make sure the target of the joke is right — that the person or institution that is deserving of ridicule is being ridiculed. I think we all have a very similar sense of humor and, as a staff, we don’t find some of that insanely cruel stuff to be that funny. Sometimes, of course, it’s fun to make a really mean joke. It’s generally not as funny when it’s directed at someone who doesn’t deserve it.

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I’d imagine shock value gets tiring.

Yeah, it’s really almost impossible to be shocking. If you’re just making a joke on Twitter, I think everyone goes for that, at this point. Now, every day, not just on official websites but on people’s Twitter accounts, there are jokes about the news everywhere.

Is that why The Onion switched to a daily schedule?

It felt a little bit weird for The Onion, which has traditionally prided itself on being a place that satirizes the news and the culture, to be sort of slow in that way. It still feels as much like news as possible because we are trying to ape an actual newspaper’s daily production schedule.

Does it help to be in a big comedy town like Chicago?

It’s good to know that we are in a town where a lot of comedy is. But our traditional way of bringing people into the fold is that someone on staff has to sponsor a specific writer, and it’s usually someone they know, and we don’t really know anyone here yet. We’re still trying to get to know Second City people and Improv Olympic people and that’s going to happen. But yeah, it’s a little bit tricky getting to know people because we are not exactly civilization’s most socially adept creatures.

You guys are closeted away playing with action figures?

Or re-watching “Kids in the Hall” sketches. We’re weird, unusual people.

But funny people?

Yeah, I mean, being Onion funny is a particular brand of funny, and there are really funny people who are hilarious in other contexts who have tried their hand at writing for The Onion and it hasn’t quite worked. Just like if I tried my hand at stand-up comedy — which I would never try — I don’t think I would be particularly good at it.

As editor of The Onion, do you feel pressure to be funny?

I don’t feel that much pressure in my personal life to be funny because we’re not performers. It’s a different thing. We’re just writers. We’re nerds, you know?

So I don’t feel that kind of performer’s pressure. And any time I do, I remove myself from that situation. I can do it if it’s in the context of The Onion, like if it’s a speaking gig that we do, then The Onion is a character that you can play. At this point, I’m capable of easily inhabiting that character. The character of myself is much less easy for me to inhabit than The Onion.

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Any last pieces of advice?

On comedy, business, or life?

How about all three?

Well, in comedy, it seems like the most simple thing in the world, but the advice that I give every new comedy writer is don’t make the joke that everyone else is making. That sounds like, well, of course, but I think you’d be surprised at how many very funny people will coalesce around what everyone thinks is funny. If everybody is making the same David Petraeus kind of joke on Twitter or at a party or on The Daily Show, just avoid that.

And business lessons, I don’t know. I don’t know what I’m doing.

Um, life? I’m even less equipped to impart any sort of lessons on anybody. I got nothing.

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