Question: In a song I am learning, there is a section of the song that has the chord progression G#m | A#m7b5 | B6
I sometimes get the fingerings wrong and use dimished 7th chords on guitar instead of m7b5 chords and in this case I actually think the dimished7th chord sounds good too. So I wanted to ask, what is the difference functionally between the two? They both seem to work in most situations as leading tone chords to a tonic chord one semitone above (B in this case).

Answer: 
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> Do m7b5 chords function the same as dim7 chords?
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If talking about function, it seems better to not use jazz chord symbols and switch to using Roman numeral analysis (RNA.)

The two chord types are *half-diminished seventh* and *diminished seventh*.

The diminished seventh chord is easier to describe first. Usually it is rooted on the *leading tone* or a *secondary* leading tone. Its RNA symbols is `viio7`. Relative to a tonic of `C` the chord would be spelled `B♮ D F A♭` (I used the natural to show that in `C` minor you would raise the `B♭` of the key signature.) The chord's basic *function* is a dominant and in that regard some people conceive of the chord as a dominant flat ninth chord with the root omitted.

The half diminished seventh chord is a bit more complicated. In major keys it is the *diatonic* seventh chord built on the leading tone. In `C` major it would be `B♮ D F A♮` and the RNA symbol would be `viiø7`. If that chord were used in a major key, its function would be a dominant. But, the chord is actually much more common in minor keys where it is the *diatonic* chord build on the second scale degree. In `C` minor is would be `D F A♭ C` and its RNA would be `iiø7`. The function of `iiø7` is a *subdominant*.

The typical function of these chords is *not* the same. `viio7` is a dominant. `iiø7` is a subdominant.

Those roles also apply to basic jazz harmony.

The diminished seventh chord can appear as a dominant or as a passing chord. The song *Bewitched* uses the chord both ways. It starts with `C C♯dim7 Dm7` or in RNA `C: I viio7/ii ii7`.

The half diminished seventh chord appears in minor, like `iim7♭5 V7alt im6`. *Autumn Leaves* is an example.
While m7♭5 chords and dim7 chords are fairly interchangeable as dominant-function chords (don't interchange them if the melody note is the 7th), the dim7 chord is a much better **pivot chord** between keys than the m7♭5 chord, as any given dim7 chord is an enharmonic re-spelling of 3 other dim7 chords, while a m7♭5 chord cannot be enharmonically re-spelled into any other m7♭5 chords. When a dim7 chord is acting as a pivot chord, interchanging it is unwise.