Are You Being Served? featured a lot of humour based on sexual innuendo, misunderstandings, and mistaken identity. In addition there were sight gags generated by outrageous costumes the characters were sometimes required to wear for store promotions, and gaudy store displays frequently featuring malfunctioning robotic mannequins. The show is well remembered for its prolific use of double entendres.

Despite this abundance of gags, the main humorous base of the series was a merciless attack on the British class system. This permeated every interaction in the show and was especially evident in the conversations between maintenance men Mr. Mash or Mr. Harman and the ostensibly higher-class store personnel.

Characters included such stereotypes as the effeminate Mr. Humphries, who lived with his mother; Captain Peacock, the haughty floorwalker who purportedly fought Rommel in the North Africa Campaign of World War II (but was actually in the Service Corps), and the snobbish and boisterous Mrs. Slocombe of the ever-changing hair colour.

The show spawned the catch phrase "Are you free?", usually said by Captain Peacock to the staff; more often than not, the staff are noticeably free, and each would look solemnly from side to side before saying, "Yes I'm free, Captain Peacock." As John Inman remarked, when Mr. Humphries trilled, "I'm free!" it became his own personal catchphrase.

During its run, the series attracted some mild criticism for its reliance on sexual stereotypes and sexual double entendres, including jokes about Mrs. Slocombe's "pussy" (cat).

John Inman's camp portrayal of Mr. Humphries as an effeminate man whose sexual orientation was never expressed was supposedly offensive to some gay men, but the character quickly developed a cult gay following. Inman pointed out that Mr. Humphries' true sexual orientation was never explicitly stated in the series, and David Croft said in an interview that the character was not homosexual, but "just a mother's boy".

With a broad mixture of stereotypical gay characteristics and some apparent heterosexual attractions, viewers were left wondering about Mr. Humphries' true sexual orientation. In an episode of the spin-off Grace & Favour, the character is further described as neither a "woman's man" nor a "man's man" and as being "in limbo".