To tease mercilessly or in such a way no one would believe you or to treat someone badly in order to get what you want.
1. (British & Australian very informal) to make a joke about someone or to make someone look silly (often + out of ) They always take the piss out of her because she's a Barry Manilow fan. 'You should wear miniskirts more often - you've got the legs for them.' 'Are you taking the piss?' (British & Australian very informal!)
2. (British & Australian very informal) to treat someone badly in order to get what you want Four pounds an hour is taking the piss. £50 for that old thing? That's just taking the piss.
It's now often used when people take liberties and don't care about the consequences, for instance someone living in a nice house and trashing it or ridings roughshod over neighbours, knowing he won't get evicted by the authorities.
Damn....Mark hasn't gotten any strange for like 5 years. The only release he gets is doing the 5 knuckle shuffleon the piss pump. Poor f*cking bastard!
To appear serious, but actually meaning the opposite - most of the time. Usually followed up by the 'piss taker' (the one who joked) revealing he/she was only joking.
'Hey did I ever tell you you're fucking pug ugly?'