Achmed is the skeletal corpse of an incompetent suicide bomber, whom Dunham uses to satirize the contemporary issue of terrorism. He is known for yelling, "Silence! I kill you!" to Dunham and people laughing in the audience. Achmed first appeared in Spark of Insanity, and later made an appearance in the Very Special Christmas Special, singing a song called "Jingle Bombs". He also dubs the so-called Guitar Guy "You racist bastard"! for warming up with typical Arab chords. Most of the humor Dunham expresses with Achmed centers on this motif. When mentioning that Achmed appears to be dead because he's a skeleton, Achmed responds, "It's a flesh wound." When Dunham inquires as to how he died, Achmed explains his incompetence with explosives, while also casting aspersions on Dunham's sexual prowess, by saying that they both suffer from "premature detonation." Although he frequently mentions working for Osama Bin Laden, Achmed claims he does not think he's a Muslim ("look at my ass! It says 'Made in China'"). As of June 2009, the sketch in which Dunham introduced Achmed is the fourth most watched online video ever, having amassed nearly 200 million views.

He, along with Walter and Peanut, are Dunham's most popular puppets. More of his past is revealed in Controlled Chaos where he had a dog with no legs that he left nameless, he didn't know the purpose of tampons and used them, he had 46 wives, and was revealed to have a son named Achmed Junior. He also owns his own car, the Achmedmobile, which Bubba J blew up and had a goat "girlfriend".