La tion dirinta amiko ridetas.

La is the definite article, meaning the.

In La tion dirinta amiko ridetas, it marks amiko as a specific friend: the friend.
Even though tion dirinta comes between la and amiko, the whole noun phrase is still:

• la ... amiko = the ... friend

So la tion dirinta amiko means the friend who said that.

Tion is the accusative form of tio, which means that.

The -n shows that it is the direct object of dirinta / diri:

• diri tion = to say that

So in this sentence, tion is the thing that was said.

A native English speaker may not expect this, because English mainly uses word order instead of an object ending. Esperanto often marks the direct object with -n.

Dirinta is an active past participle of diri (to say).

Breakdown:

• dir- = the root meaning say
• -int- = active past participle, meaning having done
• -a = adjective ending

So dirinta literally means something like:

• having said
• who said

Because it has the adjective ending -a, it can describe a noun:

• dirinta amiko = a friend who said / a friend having said

In Esperanto, participles often behave like adjectives.

So instead of always using a full relative clause such as:

• la amiko, kiu diris tion, ridetas

you can compress it into:

• la tion dirinta amiko ridetas

Both mean essentially the same thing: the friend who said that is smiling.

This is very common in Esperanto. A participle lets you turn a verb idea into a describing word.

Because dirinta is closely tied to its object tion, and Esperanto often places the object before a participle when that participle is being used adjectivally.

So:

• tion dirinta amiko = friend having said that

This structure is natural in Esperanto. It works a bit like a compact version of:

• amiko, kiu diris tion

Putting tion before dirinta makes it clear that tion belongs with the act of saying.

Yes. A very common alternative is:

• La amiko, kiu diris tion, ridetas.

This means the same thing.

Comparison:

• La tion dirinta amiko ridetas. = more compact, participial style
• La amiko, kiu diris tion, ridetas. = more explicit, clause-based style

For learners, the kiu diris tion version is often easier to understand at first.

They are related, but they do different jobs.

• diris = a finite verb in the past tense: said
• dirinta = a participle/adjective: having said, who said

Examples:

• La amiko diris tion. = The friend said that.
• La tion dirinta amiko ridetas. = The friend who said that is smiling.

So diris can be the main verb of a clause, while dirinta describes a noun.

Ridetas comes from:

• rid- = laugh
• -et- = diminutive / a smaller or gentler version
• -as = present tense

So ridetas means something like:

• smiles
• laughs lightly
• grins a little

Compare:

• ridas = laughs
• ridetas = smiles / chuckles lightly

So the sentence specifically gives a softer action than full laughing.

Because of the adjective ending -a.

In Esperanto, words ending in -a describe nouns. Here, dirinta is adjectival, and the noun it is describing is amiko:

• la tion dirinta amiko = the friend who said that

Also, the whole phrase naturally groups together before the main verb:

• [La tion dirinta amiko] ridetas.

That means:

• subject = the friend who said that
• verb = is smiling

It may be understandable, but La tion dirinta amiko ridetas is the more standard and clearer form.

Esperanto usually keeps the descriptive participial phrase together before the noun:

• la tion dirinta amiko

This makes it easy to see that tion dirinta belongs as one unit modifying amiko.

So for learners, it is best to model your Esperanto on the clearer pattern:

• la + object + participle + noun

It is somewhat more compact and stylistically denser than everyday beginner Esperanto, but it is not wrong or unnatural.

A learner is more likely to first meet and use:

• La amiko, kiu diris tion, ridetas.

The participial version:

• La tion dirinta amiko ridetas.

is perfectly good Esperanto, but it feels a bit more compressed. You will see this style in normal writing, and advanced speakers use it comfortably.

So it is useful to understand, even if you might not use it much right away.