Actually two words made into one compound word, it is basically saying "lol, fag". Usually meaning "Lol, you're a fag" or "Lol what a fag".
Tom: I can't beat level three :(
John: Lolfag

or

Tom: Some guy slapped my butt in the locker room O_o
John: Lolfag
by Saru November 6, 2007
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lolfag stands for "lots of love for all gays". It's a friendly term to show how un-homophobic you are. It's mostly used when someone says something gay to show that you aren't judging them.
Person1: I'm super! Thanks for asking!
Person2: lolfag
by shawabawa October 6, 2010
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A title assigned to a noob worthy of being laughed at.
Bryon is such a lolfag, he wrecked his car into a pole.
by hivoltage June 13, 2008
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a polite way to call someone a fag
John: Hey Eddie!
Eddie: Have you been to the restaurant?
John: Yeahh!!! (searches it on wikipedia)
Eddie: Really? Whats your favorite thing to eat?
John: uhh uhh... (nervously rifts through wikipedia) uhh uhh pocky sticks!
Eddie: lolfag
by ninjayellowred July 11, 2008
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A title assigned to a noob worthy of being laughed at.
Bryon is such a lolfag, he wrecked his car into a pole.
by hivoltage June 13, 2008
Get the lolfag mug.