|Right maxilla of the holotype|
In 1860, Sixt Friedrich Jakob von Kapff at the Heslacher Wand near Stuttgart discovered the upper jaw bone of a large reptile. The type specimen, which Hermann von Meyer declared to be distinct from Belodon, was described and named by the latter as the type species Teratosaurus suevicus. The generic name is derived from Greek τέρας, teras, "[ominous birth of a] monster" and sauros, "lizard". The specific name refers to Suevia. The holotype, BMNH 38646, was found in the Mittlerer Stubensandstein. It consists of a 245 millimetres long right maxilla with six large, up to five centimetres long, teeth, erroneously interpreted by Meyer as the left maxilla. It indicates a body length of about six metres.
Later authors, such as Kapff himself, von Huene, Osborn, and Edwin H. Colbert, incorrectly attributed postcrania of the sauropodomorph dinosaur Efraasia to this species or genus and, as a result, it was thought to be a representative of a presumed group of carnivorous Prosauropoda or, alternatively, a very primitive theropod. Following this lead, many popular books in the 20th century depicted "teratosaurs" as the earliest sort of large-bodied meat-eating dinosaur, walking on two legs and preying on the prosauropods of its day. It was thought by many to be a Triassic ancestor to the "carnosaurs" of the Jurassic. Sauropodomorph material was described as Teratosaurus species such as Teratosaurus minor and Teratosaurus trossingensis.
In 1985 and 1986, Peter Galton and Michael Benton independently showed that Teratosaurus is actually a rauisuchian, a type of nondinosaurian large predatory archosaur, walking on all fours, which lived alongside dinosaurs during the Late Triassic.
Apart from the holotype and the sauropodomorph fossils, also some teeth probably belonging to various carnivorous archosaurs were named as Teratosaurus species. These included Teratosaurus lloydi, a renaming of Cladeiodon lloydi Owen 1841 by Huene in 1908, and Teratosaurus bengalensis. Teratosaurus silesiacus, described in 2005 by Tomasz Sulej on the basis of a left maxilla, was transferred to the genus Polonosuchus by Brussatte et al. in 2009.
- C. E. H. von Meyer. 1861. "Reptilien aus dem Stubensandstein des oberen Keupers", Palaeontographica 7: 253-346
- Benton, M.J. (1986). "The late Triassic reptile Teratosaurus - a rauisuchian, not a dinosaur". Palaeontology 29: 293-301.
- D. Dixon, B. Cox, R.J.G. Savage & B. Gardiner, 1988, Macmillan Illustrated Encyclopedia of Dinosaurs and Prehistoric Animals: A Visual Who's Who of Prehistoric Life, Macmillan pp 312
- F. v. Huene, 1908, Die Dinosaurier der Europäischen Triasformation mit berücksichtigung der Ausseuropäischen vorkommnisse. Geologische und Palaeontologische Abhandlungen Suppl. 1(1): 1-419
- Galton, P. M. (1985). "The poposaurid thecodontian Teratosaurus suevicus Meyer, plus referred specimens mostly based on prosauropod dinosaurs". Stuttgarter Beiträge zur Naturkunde, B, 116: 1-29.
- F. v. Huene. 1908. "Eine Zusammenstellung über die englische Trias und das Alter ihrer Fossilien". Zentralblatt für Mineralogie, Geologie und Paläontologie 1908: 9-17
- H.C. Das-Gupta. 1928. "Batrachian and reptilian remains found in the Panchet Beds at Deoli, Bengal". Journal of the Asiatic Society of Bengal, New Series 14(13): 473-479
- Sulej, T. (2005). "A new rauisuchian reptile (Diapsida: Archosauria) from the Late Triassic of Poland." Journal of Vertebrate Paleontology, 25(1):78-86.
- Brusatte, Stephen L.; Butler, Richard J.; Sulej, Tomasz; Niedźwiedzki, Grzegorz (2009). "The taxonomy and anatomy of rauisuchian archosaurs from the Late Triassic of Germany and Poland". Acta Palaeontologica Polonica. 54 (2): 221–230. doi:10.4202/app.2008.0065.
- On the Classification of the Dinosauria with Observations on the Dinosauria of the Trias - Quarterly Journal of the Geological Society (1870) Scientific Memoirs III