This amusing word has two alternative spellings which are most widely used in the English language and guess what? Both of them are correct. Humor without the u and humour with the u both have the same meaning and pronunciation, the only difference among them is their prevalence in different parts of the world.
Humor as noun:
Humor is a state of mind or a mood of a person.
Humor as verb:
Humour with a u is most commonly used in British and the rest of the English speaking world except America, which has a habit of separating themselves from everyone. This habit of theirs have led to changes in the spellings of many words making them shorter wherever possible. So humor without the u is the acceptable form of writing humor in American English and thus American writings. This American British distinction extends to all the derived participles like humored/humoured and humoring/humouring all over the world except one; humorous. When the adjective form of humor, humorous is involved, the second syllable u always dropped.
The American way of entertaining others is humor, the shorter spellings without u as suggested by a famous American lexicographer, Noah Webster. So if you live in America, you might want to omit the u while writing humor.
Everyone else in the world (except America) is entertained by humour, the longer form with the u which is the older word and spellings originated from Latin. So if you live in British or any other country of the world except America, you should use the longer version of humour.
Humor or Humour:
It is really simple to remember that which humor is common where. If the spellings are shorter, it’s American and if they are longer, it belongs to everywhere other than America. One reason of choosing one alternative is from the other is the audience you are writing for. If you are writing for global audience, you should use humour but if your audience is specifically American, you should use humor.