Friend makes fun of me for being lesbian?

Okay so yeah she knows I am gay and she always makes jokes, and I just pretend to laugh and stuff, I don't wanna say any thing cos I fear she will not like me anymore and it will be awkward between us, and so what do I do to kinda indicate to her to stop?

Have a private talk to her and explain the situation. Maybe she'll understand and won't do it anymore. It's not guaranteed that she will understand but it's at least worth a try.