Oozo is an inflated roly-poly clown doll who says “Ha! Ha! Ha!” repeatedly, as there is a speaker inside the balloon. Bernard Bernoulli tries to push him, but he is knocked over. Bernard finds him terrifying especially in his childhood. While technically not a character, being inanimate is treated like one by interactions (using the disappearing ink on him, reading the textbook to him, etc.).
Bernard eventually stabs him using the scalpel that was originally in Laverne's inventory, thus deflating him, and takes the laughing speaker that was inside.
Oozo originated as one of many support items in the game Zombies Ate My Neighbors which shared the approximate development time as Day of the Tentacle. In ZAMN, Oozo worked as a decoy, using its speaker-generated laugh to attract all Zombies within a certain area towards it.