Puppetland is an area of the Playhouse where Cool Cat, Dirty Dog, and Chicky Baby lived. It is also the purported location where all the Playhouse characters live. It does not appear in Pee-Wee's Big Adventure, Big Top Pee-Wee and Pee-Wee's Big Holiday, however.
According to Paul Reubens, Puppetland is a location on Earth that takes the form of a fantasy land that would be reminiscent of the land from H.R. Pufnstuf and Oz from The Wonderful Wizard of Oz.