A live-action work involves filming things from the reality we see around us, while animation involves creating our own images in whatever style we wish. Animation varies in how realistic it is. Some animations depict perfectly normal events that could happen in real life. Others rely on surreal events that wouldn't make sense in a live-action work. So at times it's ambiguous whether or not events taking place in an animated work are seen as live-action by the characters, like the creators and audience see things in real life, or if the world actually looks animated to them in the same manner we see it.
A work that lampshades certain cartoon conventions (such as White Gloves or Cheated Angle) probably indicates that the world appears to the characters the same way as it does to the audience. Animated Actors makes the characters explicitly living, animated characters acting in a live-action world. Medium Awareness is when the characters understand this, which can lead into Leaning on the Fourth Wall. A Fourth-Wall Portrait may be a sign of the "actually live-action" variant.
See also Musical World Hypotheses, which is this trope except for musicals.
- Dora and the Lost City of Gold has a scene where the characters enter a Mushroom Samba and see themselves as cartoon characters in an identical style to the series it was based on.
- In Space Jam, the Looney Tunes characters live in their own, animated world while the humans live in ours. When Bugs and Daffy cross over, Daffy calls our world "3D-land."
- Who Framed Roger Rabbit mostly takes place in a live-action world where cartoon characters are separate beings, while Toontown is explicitly animated and works on Cartoon Physics (though humans who enter remain live-action).
- In TheOdd1sOut video "Buying Clothes", some people reveal that they do see themselves like in the art style. They point out that they never wear clothes, and instead of moving their mouths, they just open them and words come out.
- Madness Combat characters are drawn in a simplified style with Floating Limbs. The short "An Experiment" shows that the hands really aren't physically connected to the bodies and can be moved far away from them, albeit not without reality-glitching side effects.
- The Order of the Stick: One of the creator gods outright refers to the world as a "self-aware stick figure fantasy parody". The cartoon style is sometimes referenced for gags, like when a sketch artist's Fourth-Wall Portrait is panned for including noses, and becomes a plot point when a Shadowdancer's powers are stymied by the art style's lack of shadows.
- Arthur is somewhat ambiguous about this. The spinoff Postcards from Buster showed the videos Busters makes as live-action with everyone portrayed as humans, implying that this is how the characters see their world. The main series, however, is more confusing on the matter— sometimes the characters will mention the fact that they are animals, but other times they say they are humans.
- The Warner siblings are aware that they're cartoons. In fact, they once sang a parody of the Major General Song called "I am the Very Model of a Cartoon Individual".
- Slappy is also aware that she and the others are cartoon characters. In "Bumbie's Mom," after seeing a parody of Bambi, she reassures a sad Skippy that the deer's mother didn't really die, since cartoon characters never do. She demonstrates this by blowing a passerby up, only for him to survive.
- In Cartoon All-Stars to the Rescue, Michael and Corey repeatedly acknowledge that characters like The Smurfs and Huey, Dewey, and Louie are fictional cartoon characters. However, when Bugs Bunny talks to Smoke, Smoke calls Bugs a "Cartoon", to which Bugs retorts that Smoke (who, in-universe, is a being produced by Michael's weed smoke) is also a cartoon, making it ambiguous as to just what is and isn't a cartoon in-universe, and how the human characters actually see them.
- In a Looney Tunes episode, Daffy self-identifies as an "animated cartoon" while talking to the artist.
- In The Simpsons, the characters see themselves with the art style—occasionally pointing out their own yellow skin, unusual overbites, and four-fingered hands. In one episode, the kids freak out over not having visible hairlines.
- South Park:
- The Show Within a Show Terrance and Phillip is referred to as a cartoon but the actors Terrance and Phillip, who play themselves, look identical to their animated appearances and are not Animated Actors. The idea of Terrance and Philip being animated was retconned, as later depictions of their show have it filmed on a set, not animated. It's also later shown that all Canadians look like Terence and Phillip.
- The episode "Grounded Vindaloop" ended with a gag suggesting the entire world of the show is a VR simulation explored by live action versions of the boys.
- In "Free Willzyx", a missing-child poster of the four main kids shows them drawn realistically.
- While the show gives most child characters the exact same simple facial design, several episodes imply that the characters see themselves in a more detailed manner. However, this is contradicted in "Super Best Friends", where Stan, Kyle, and Butters all get buzz cuts and wear matching outfits, which leads to them being unable to tell themselves apart.