An acronym standing for Laughing My Anus Off. It literally means laughing until your anus becomes detached from your body. It is a serious medical condition and must be treated AS SOON AS POSSIBLE.
Billy thought lmao was just an expression used when something was funny. He was dead wrong. He told his friend Jerry a knock-knock joke over IM, to which Jerry responded "lmao." The next day, Jerry was found dead at his keyboard. His anus was nowhere to be found.