To make someone who's trying to seem important less important. Derives from the piss-boner men wake up with in the morning, it's a fake boner. If you took the piss away, there would be no boner. Do you see?

That's the original meaning, however taking the piss now means just giving someone a ribbing and in the most part not meaning to be malicious.
Original meaning:

Guy 1: "Hey guys, what do you think to my awesome new haircut?"

Guy 2: "I think you look like a fucking prick, mate...you look like a real slob".

Other guys: "Haha, Guy 2 really took the piss out of guy 1!"

Meaning as it is now:

Guy 1: "Man, I only got a 45 on my last assignment"

Guy 2: "Haha that's fucking shit!"

Guy 1: "Don't be so mean"

Guy 2: "Cheer up man, I was only taking the piss"
by L-Shizzle November 15, 2007
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Generally Irish expression with the implications:

1) To joke with someone, to say something without intending it.

2) (Similarly), To lie in an obvious manner.
1) E.g "The guy said I was a dick, but I knew he was taking the piss".

2) E.g "The driver told the Police that he was sober, they said "You're taking the piss" and arrested him.
by joshow March 07, 2016
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If your taking the piss it means you are being sarcastic about something but in a serious tone of voice
Friend 1: God look in the mirror ugly

Friend 2: Whatttt?? ;(

Friend 1: Haha, only joking. I'm just taking the piss ;)
by EbbyMc_03 May 16, 2016
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vb. Medical.

When one is asked to provide a urine sample at a hospital, clinic or doctor's surgery, one hands the jar to a nurse who is said to 'take the piss'.
I had to go to the clinic and the nurse took the piss out of me
by Ben Dover of the Yard September 04, 2004
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