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I've heard numerous references to this line in various places but have not been able to pin down the origin. Presumably, the joke is that a performer will ask this question to the audience, and when someone identifies themselves as out of town the performer takes the question more literally and asks the location of a place called "out of town".

One concrete example; The Junk Mail episode of Seinfeld, Jerry telling George about a payment he received working as a comedian at a car dealership:

They gave me a new car for thirty minutes of 'So, who's from out of town?'

Another example is harder to pin down because I don't remember exactly where I saw it, but another TV show featured someone preparing a young man to go on stage and fed him some admittedly bad material, and suggested the line as his opener. The way the show was edited made it look like the line did not play well to the crowd, though some seemed to have recognized the line.

Further, I've heard this line referenced by relatives who also would referenced it as an opener in fictional situations making it seem more like a "go to" and/or cliché joke.

Where did this line originate from?

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    I think it's just from comedians talking to the audience, asking where they're from, and then making a joke about that place: this is still very common. They ask who's out of town so they can find where they're from. Comedians doing this will have jokes about different towns and countries, as well as playing off the audience's reaction. It's not a joke about "Out Of Town" being a place. The practice seems lost in the mists of time although presumably someone could hazard a guess. (There isn't really a SE about stand-up comedy, although there is Literature and Movies & TV.)
    – Stuart F
    Dec 6, 2021 at 11:06

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