The cognitive processing mechanism of humor refers to how the system of neural circuitry and pathways in the brain deals with the incongruity in a humorous manner. The past research has revealed different stages and corresponding functional brain activities involved in humor-processing in terms of time and space dimensions, highlighting the effects of the time windows of about 400 ms, 600 ms, and 900 ms. However, much less is known about humor processing in light of the frequency dimension. A total of 36 Chinese participants were recruited in this experiment, with Chinese jokes, nonjokes, and nonsensical sentences used as the stimuli. The experimental results showed that there were significant differences among conditions in the P200 effect, which signified that the incongruity detection had already been integrated and perceived at about 200 ms, prior to the semantic integration at about 400 ms. This pre-processing is specific to Chinese verbal jokes due to the simultaneous involvement of both orthographic and phonologic parts in processing Chinese characters. The analysis on the frequency dimension indicated that beta’s power particularly reflected the characteristics of different stages in Chinese verbal humor processing. Jokes’ and nonsensical sentences’ relative power changes on the beta band ranked significantly higher than that of nonjokes at about 200 ms, which suggested the existence of more difficulties in meaning construction in pre-processing the incongruities. This indicated a continuity between the analysis of event related potential (ERP) components and neural oscillations and revealed the key role of the beta frequency band in Chinese verbal joke processing.