Parodied in a series of ads for McDonald's in the UK, which showed people running from a superimposed cute Pug in a lizard costume. The idea being that this is what you got if you spent 99p on a special effects budget instead of their Pound saver menu.
Also in a Heinekin ad which showed a tortoise with stegosaurus plates glued to its shell.
One FoxTrot strip features Jason trying to make his iguana look like a dinosaur by taping a fan to its back. Another time, after failing to Follow the Leader after Air Bud by teaching him to play sports, he tried to make a Godzilla-esque monster movie by dropping him on a miniature city.
The Trope Namer example (albeit by fans of the film), and the one where most of this footage comes from is One Million BC with Victor Mature and Carole Landis (remade by Ray Harryhausen and Charles Shneer as One Million Years BC featuring Raquel Welch). This film had a plethora of animals in makeup and/or visually enlarged to make them look monstrous. The image above is from this movie. Other examples from this film include an Elephant in fur as a Woolly Mammoth, a pig with glued on horns and a tail as a Triceratops, Alligator with a Glued on Fin (enlarged), various enlarged lizards (monitors, iguana, skinks) as Dinosaurs, a snake and enlarged Coati(the coati eats the snake on screen) and an (enlarged) armadillo with rubber horns. It also featured a Rubber Suit T-Rex which was NOT enlarged in any way. Yeah, it's So Bad, It's Good. The FX from this film got reused from the 1940s through the 1960s in such well known films as: Tarzan's Desert Mystery, Two Lost Worlds, The Lost Volcano, the American version of Godzilla Raids Again, Jungle Manhunt, Untamed Women, Robot Monster, King Dinosaur, Teenage Caveman, Valley of the Dragons, Journey to the Center of Time, Horror of the Blood Monsters (the stock footage was tinted in color for this film), and the Mexican films Island of the Dinosaurs (La Isla De Los Dinosaurios) and Adventure at the Center of the Earth (Aventura al Centro de la Tierra). If you've seen much MST3K, you've probably seen the footage in question a few times.
The Harryhausen movie generally avoided this (favoring stop-motion instead), although a real lizard and spider were thrown in around the beginning to liven things up (and as an homage to the original film which did employ it). A few critics complained that the Archelon scene used a real turtle, but it didn't; Harryhausen just made a really good model. The picture above is currently that example.
A mammalian example would be the film The Killer Shrews. When the so-called giant shrews were not being played by cheap puppets, they were being played by dogs in very unconvincing costumes. This is hilariously pointed out in the Mystery Science Theater 3000 episode that featured this movie.
As another mammalian example, it was parodied in Team America: World Police, with Kim Jong Il's "deadly panthers" played by black cats.
The 1960 adaptation of Arthur Conan Doyle's The Lost World is notorious for this. Particularly when Claude Rains identifies an iguana with plastic fins as a brontosaurus. The most definitely not-fake alligator vs. monitor lizard battle shows one of the main reasons why this trope isn't used anymore. This is the last real use of this trope in the classic sense.
In the 1959 film Journey to the Center of the Earth, optically enlarged lizards with fins glued to their backs play dimetrodons, a synapsid that actually looks... sort of like a lizard with a fin on its back (though the ones in the film are somewhat larger than their real-life counterparts). They don't actually look too bad.
Although, this is later played again with an even bigger monitor lizard in the ruins of Atlantis which they didn't even try to pass off as anything unique.
In King Dinosaur (from 1955) an iguana plays a Tyrannosaurus rex (which, for some reason, lives on another planet). Hilariously, the biologist identifies the obvious iguana as a tyrannosaur! As well as throwing in One Million BC Stock Footage.
The large fire-breathing dragon in 1971 Swedish fantasy comedy Äppelkriget/The Apple War is played by a little lizard. Then again, the special effects are really not the point of that film.
A similar example appears in the 1970s Czech fairy tale movie Princ a Večernice (The Prince and the Evening Star). During the prince's epic journey to fulfill his quest, he has to climb a high cliff at one moment. When he finally reaches the cliff's edge, a dragon-like monster appears before him... played by the all-time slurpasaur favourite — an iguana! This gets justified and subverted in an amusing way though : The "dragon" immediately vanishes, since it's just another illusion summoned by the evil wizard of the story, who's trying to discourage the prince from continuing further...
Parodied in Tim Burton's short film Frankenweenie. The film opens with the projection of the protagonist's homemade film, on it, "dinosaurs" made of handkerchief sock puppets "fight" and then the "monster" appears: the protagonist's dog in a costume.
Proving that it's possible to dress up an animal and make it work, the banthas from A New Hope were played by elephants draped with thick furs and puppet heads. Averted with Yoda, who was initially conceived as being portrayed by a costumed monkey rather than a puppet.
The Land Unknown (1957) had two stegosauruses fighting each other which were obviously photographically enlarged monitor lizards.
King Kong vs. Godzilla features a giant octopus as a bonus monster on top of the two in the title. For the most part it was portrayed by a live octopus, but in a few shots it was replaced by a rubber model or a stop-motion model.
Nosferatu used a striped hyena to pose as a werewolf.
One can't help but wonder if using a dog was rejected for being too unrealistic.
Bruce Coville'sCamp Haunted Hills trilogy is set at a camp where the attendees learn how to make movies. Harry Housen, who teaches special effects, specializes in holographic projection and is always painting his pet iguana Myron different colors, or pasting wings, fins or other things on the lizard, even figuring out how to make smoke come out of Myron's nostrils at one point, and then uses the altered iguana as a model for said holograms. Fortunately, the lizard is very patient about all this. The resulting holograms are more effective than one would think - they terrify both humans AND, in the finale, a family of Bigfoot holding the heroes captive.
Live Action TV
Subverted (in a way) in the Doctor Who story "Colony in Space". A robot with claws plus a hologram simulates a giant lizard attack.
The same plot point was used in the later story "Vengeance on Varos", only with a hologram (stock footage) of a fly instead of an iguana. Doctor Who also played the trope straight at least once.
One of the more infamous examples is from The Talons of Weng-Chiang, in which close-ups of a rat in a model sewer are meant to suggest a terrifying giant rat. A man in a rat costume is also used. Sadly, and predictably, the real rat and the rat suit of course look nothing alike.
Parodied in a Little Red Riding Hood-based skit on Monty Python's Fliegender Zirkus (also seen in Monty Python Live at the Hollywood Bowl) in which the Big Bad Wolf is played by a tired-looking dachshund with a piece of faux fur tied to its back.
An interesting case where this actually works is the BBC documentary series Monsters We Met. The giant Haast eagle is played by an enlarged Harpy eagle, and it's downright creepy.
An AFV submission spoofing Jurassic Park used dinosaurs played by guinea pigs. GUINEA PIGS.
An episode of Star Trek: The Original Series had a lovable alien creature played by...a pomeranian with a horn stuck between its eyes. Granted, it fulfilled its main requirement: it was cute, and could alternately be lovable/evil.
Klingon targs throughout the various series were generally played by largish dogs in costume, although since the targ was supposed to be roughly that size and mammalian (vaguely like a small, angry boar), it didn't go too poorly.
The Star Trek: Voyager episode "Resolutions" used a spider monkey that had been trained to walk on its hind legs.
Merlin occasionally has Arthur fighting giant underground monsters, vaguely mammalian but with no hair and huge front teeth. They are actually naked mole rats filmed close-up and superimposed on the action. And this from a series that routinely includes a convincing CGI dragon.
Despite being created with CGI, the Ancestral Komodo Dragon from Terra Nova may be a subtle parody of this trope.
In a shout-out to the Doctor Who example above, Dr. Terrible's House of Horrible used miniature footage of an ordinary crab superimposed on footage of a sewer, as well as some footage of a claw puppet, in order to give the impression of a Giant Enemy Crab.
And the Shark Pool is full of little dogfish — you can't say they aren't sharks!
Thunderbirds episode "Attack of the Alligators" features an accident with some kind of Super Serum getting into the water table near a laboratory somewhere in Louisiana. Live baby alligators were employed on model sets alongside miniatures of the characters, but since working around the limitations of models and miniatures was what Gerry Anderson Productions did, it actually worked fairly well. Have a look.
It doesn't hurt that alligators are actually scary on their own. (Although it's rather easy for reptile aficionados to tell that they're babies.)
Actually, a Super Serum that only affects creatures while they're still growing makes more sense anyway... which suggests the giant 'gators were going to get bigger.
In a joke Dragon Magazine contest in which gamers had to write about why they love GiantSpaceHamsters, one entry claimed to love how, instead of using a miniature, they could set their pet hamster loose on the gaming table and have a really random encounter.
Parodied by Olive Jar Animation's Gila Monster! Each episode of this stop-motion animation series ended with the director letting his pet iguana (obviously not gila monster) wander through the dollhouse-sized sets. Best episode ended with the iguana "tasting" part of the scenery. D'awww...
Also parodied in the South Park "The Startling" story arc, which really needs to be seen to be believed.
"Guinea Dragon!!!" "Run for your lives! It's a Guinessaurus rex!"
In one episode of Doug, Doug and Skeeter were making a monster movie in their backyard. They attached a cardboard shark fin, tail, and jaws to Porkchop, to make him into a "shark dog".
Leonardo da Vinci supposedly glued some wings onto a lizard and told his friends he'd found a real dragon, before revealing the truth. Imagine him telling them all they'd been punk'd.
The Fiji Mermaid, a hoax created by sewing together the corpses of a fish and a monkey.
When platypus specimens were sent to Europe shortly after Australia was settled they were widely believed to be an example of this.
Another hoax was the Jenny Haniver; it's actually just a mangled carcass of a skate or ray, but they got paraded around by curiosity-cabinets and such for years as some kind of bizarre new monster.
Ever wonder why you know exactly what a unicorn horn looks like, with the spiral running down it? It's because during the Middle Ages, "unicorn horns" were common both in Wonder Cabinets and in rich people's home-remedies (mostly for impotency)—they actually came from narwhals.
Not even people are exempt! During the 1800s especially, actors would be pretend to be 'wild men' from jungles, islands, and so on. One from the San Fransisco Barbary Coast era was known only as Oofty Goofty, the only words he spoke while in costume; his handlers first covered him in tar, then stuck horse hair into it. In the end, he had to go the hospital because it wouldn't come off, and he wound up having to soak in chemical thinners on the hospital roof for a few days. The end result of which killed off most of his pain receptors on his body, allowing him to think up his next great act: have people pay to hit him with a baseball bat since he 'felt no pain'. This act lasted until a heavyweight boxer gave him a whack and cracked several ribs.
The Pleistocene varanid lizard Megalania could be seen by some as nature's example of this trope.
Draco lizards look like they're this trope, when they have their gliding-flaps extended. They're real lizards that can protrude their ribs outwards to support sail-like structures along their sides.