When Alice meets the eccentric Caterpillar she realizes that she is not in London anymore.
Like most scenes from the film, this encounter was filmed in live action as an aid to the animators.
Kathryn Beaumont acted out these moments beautifully, and Milt Kahl started animation on the title character of the film for this sequence. (Reflecting on his work years later, Milt thought he came up with a cute Alice here, but that some other animators fell short of producing quality footage with the girl.)
I am not particularly fond of the Caterpillar's design, I think that several book illustrators came up with more intriguing concepts for this character, like this illustration by Harry Rountree:
Backgrounds and cels don't match in these images, but they provide a glimpse into the astonishing stylized art direction of the movie.
A couple of many beautiful color sketches Mary Blair produced for this sequence.
Images Disney/Heritage Auctions
