The present treatise intends to consider the methodology of Rakugo when it is applied to the fi eld of education. For the last 20 years, I have been giving lectures on Rakugo with practice lessons using a short story to elevate thinking power at various educational institutions.Most Rakugo punch lines (Ochi) are created by lateral thinking, and therefore they are often contrary to the expectation of most audiences. Such lateral thinking is a weak point to listeners in class. Lateral thinking is based on various different viewpoints and it will therefore lead you to totally unexpected new ideas unrelated to ordinary ones.Lateral thinking is often compared to vertical thinking, which requires profound related knowledge. Students are expected to think about things for themselves and tell their ideas as smoothly as possible. Rakugo has some elements to educate students in these abilities.The present treatise makes these elements clear from three points of view: (1) thinking(Escape from groundless imagination!), (2) ism(What is laughed at?), and (3) skills (Punctuation marks in spoken language).