(Photo: Frank Kovalchek)
William Rapaport of the University of Buffalo (naturally) devised the construction in 1972. How can it possibly be correct? First, let's look at the sentence with his original capitalization:
Buffalo buffalo Buffalo buffalo buffalo buffalo Buffalo buffalo.
Esther Inglis-Arkell of io9 unpacks its meaning:
"So, buffalo who live in Buffalo (e.g., at the Buffalo Zoo, which does, indeed, have buffalo), and who are buffaloed (in a way unique to Buffalo) by other buffalo from Buffalo, themselves buffalo (in the way unique to Buffalo) still other buffalo from Buffalo."
The sentence relies on a few tricks. The first is that "buffalo" is a verb as well as a noun and the name of a place. To buffalo someone is to confuse or fluster a person. There's also a missing "that." Under normal circumstances, we can sometimes drop a "that" from a sentence, as long as the nouns still make the meaning clear. For example, "things I knock down don't get back up," and "things that I knock down don't get back up," are equally clear. All-buffalo sentences muddle it up a bit.
Rapaport wrote it for a philosophy class experiment when he was in graduate school. You can read more about this sentence and see it helpfully diagrammed at io9.
-via Joe Carter