In October 1969, Rolling Stone magazine published a review of the eponymous record The Masked Marauders. The double LP was set to be released by Deity Records right at the height of the "supergroup" phase in rock music that started with Cream and included groups like Crosby, Stills, Nash & Young.
The review wasted no time in identifying the band's surprising lineup, saying that:
[The] two-record set may evoke an agonizing, tip-of-the-tongue, lobe-of-the-ear recognition in some, or cries of "No, no, it can't be true" in others. But yes, yes it is - a treasured, oft-xeroxed sheet of credits (which, for obvious contractual reasons, will not be reproduced on the album), and the unmistakable vocals make it clear that this is indeed what it appears to be: John Lennon, Mick Jagger, Paul McCartney, and Bob Dylan, backed by George Harrison and a drummer as yet unnamed - the "Masked Maurauders." (sic)
The review goes on to note that the record was recorded over only three days, "with impeccable secrecy in a small town near the site of the original Hudson Bay Colony in Canada." It describes the tracklist, which includes a Dylan-lead cover of "Duke of Earl" and "Mick Jagger's new instant classic, 'I Can't Get No Nookie.'" Finally, the review breathlessly ends with "[i]t can truly be said that this album is more than a way of life; it is life."
If a double album from three Beatles, a Rolling Stone, and Bob Dylan sounded too good to be true, that's because of course it was. The review had been written by a real Rolling Stone critic (under a pseudonym), who thought he had left enough clues to make it easy to figure out that the review was a work of satire and a commentary on the supergroup fad.
But he was wrong. After the review was published, fan interest and rumors spread rapidly; it was as though people wanted it to be true so badly that they would not accept that it could not possibly be so. So, Rolling Stone did what any responsible group of journalists would: they invented the record out of whole cloth. Hiring the Cleanliness and Godliness Skiffle Band out of Berkeley, California, they commissioned the aforementioned "I Can't Get No Nookie" and "Cow Pie," a Dylan-lead song about, well, a cow pie. They pressed a few records and sent them to big rock stations in LA and San Francisco, who played them and gave even more credence to the myth.
Eventually, Warner Brothers fronted $15,000 for a full-length record. The final product was only two sides rather than four - there's only so much Dylan imitation a skiffle band can do, I suppose - but included a number of the tracks from the original review. In keeping with the gag, Warner Brothers actually invented a music label so that the album could be released by Deity Records. It was the one and only release by that label. Accounts differ (including this great, playful Brian Williams story about how he was duped), but it seems that by the time the record came out the joke was mostly well-understood. Astonishingly, though, 100,000 copies of the record were sold. Writing in The Village Voice in 1970, the famous rock critic Robert Christgau ruminated on the hoax and its larger message, and called the record his "Album of the Year."
If you are interested, the whole record is available on Rdio and Spotify. Or you can hear a poor imitation of Bob Dylan doing "Duke of Earl" at the link.
BONUS FACT: This one is in the category of "trivia everyone knows," but Dylan and a Beatle actually did team up as part of a supergroup much later in their careers: Bob "Lucky Wilbury" Dylan and George "Nelson Wilbury" Harrison played in The Traveling Wilburys with Tom Petty, Jeff Lynne, and Roy Orbison. The band put out two studio records: Traveling Wilburys Vol. 1, and the brilliantly-named second album Traveling Wilburys Vol. 3. Here's the Wilburys doing "Handle With Care."