Lighthouse Island is a half-hour telefilm which aired as the second half of The Jim Henson Hour's episode 102 on April 21, 1989. It later appeared as part of the Muppet Matinee programming block on Nickelodeon.
Zeb Norman comes to a strange small island town in search of the perfect gift for his fiancée, Rosalie. Zeb has never met Rosalie, but has fallen in love with her through an exchange of letters. He finds just what he's looking for in a pair of silver slippers at a local antique/curio shop owned by Clara Buford, but before he can obtain them, Clara insists that he accompany her to nearby dark, mysterious Hog Island so she can retrieve a pearl stolen from her by her rival, Fred. As it turns out, the pearl bestows upon its owner the power of transformation, and when Fred sees them coming, he takes action. As he takes on the form of a sea monster, a flying beast, and a giant tentacle, the success of Zeb and Clara's mission is suddenly very much in question.
- Muppet performer Jerry Nelson appears in the special as the villainous Fred.
- In its initial airing as part of The Jim Henson Hour, the special's opening scenes featured an introductory voice-over by Jim Henson. When the special was rerun on Nickelodeon as part of the Muppet Matinee series, the voice-over was dropped.