Long before George Pal was delving into the world of live-action, science fiction, and fantasy films, he was breaking new ground in replacement animation. During the 1930s and ’40s, Pal introduced a series of animated puppet films called the Puppetoons. Instead of the typical stop-motion animation, Gal used a series of different hand-carved wooden puppets (including alternate hands and limbs) for each frame. A typical Puppetoons short featured 9,000 individually carved wooden figures and parts.

The original idea for the series came in 1932, when Pal made an advertising film using "dancing" cigarettes. This led to theatrical advertising shorts for Phillips Radio and then Horlicks Malted Milk. When Pal eventually brought his Puppetoons idea to the US in 1940, he produced dozens of shorts for Paramount Pictures. From 1941 to 1947, Gal won eight Academy Awards for those shorts and even received an honorary Oscar in 1943. The series ended due to rising costs, which increased from 18,000 to 50,000 per shot, following the war.

Puppetoons was sold to television distributor U.M. & M. TV Corporation in 1956, who was later bought out by National Telefilm Associates. Through the 1950s and ’60s, the company continued to syndicate them as "Madcap Models." The Puppetoons name, general technique, and characters were used to create several live-action feature films including The Great Rupert (1949), and The Wonderful World of the Brothers Grimm (1963). In 1986, Arnold Lebovit collected several Puppetoons and released them theatrically as The Puppetoon Movie to reintroduce them to audiences. Lebovit also released a feature length documentary on the life and films of George Pal.

While animation has come a long way since the 1930s, George Pal's Puppetoons opened a new doorway to expanding the animation world. Many of his techniques are still used in creating movies and shorts today.