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How's it hanging?

How are you? or What's up?

It refers to a guy's external organs of reproduction. The answer should therefore be based on whether or not they are comfortably positioned in the undergarments.
"How's it hanging?"
"I'm fine, thanks! I just got out of the closet, finally I can express my true self instead of living a lie!"

or

"How's it hanging?"
"Long and loose and full of juice!"
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How's it hanging bro? 

Means you're on speaker and your girlfriend is next to you and you're about to ask some questions.

how's it hangin'

How's it hangin' is a very informal way to say hello to your fellow. What is actually hanging, is evident from the following example.
- Hi, Mike, how's it hangin'?
- A little bit to the left.
how's it hangin' by KAO1 November 13, 2005

how's it hangin 

How's it hangin is a polite greeting from one man to another. "It", in the context, is the man's penis. Presumably if it's hanging well, the man is doing well.
Jerry: Hey John, how's it hangin?
John: Long and low, Jerry, long and low!
Jerry: that's great!
how's it hangin by RexGibson April 26, 2004

Howsit hangin 

The preferred casual way to write “how is it hanging” which in is a colloquial phrase meaning generally the same thing as “how are you doing?” or “how is it going?”. There is a loose reference to male genitalia being made when one says this phrase, however the reference is relatively unimportant to the actual meaning.
1. (Normal)
Person a: “hey man, howsit hangin”
Person b: “aww man, i dunno its been good”

2. (Funny)
Person a: “hey man howsit hangin”
Person b: “low, and slightly to the left