Pyg was created by writer Grant Morrison and made his first appearance in Batman #666, an issue that focused on the hellish future of Gotham in which Damian Wayne was Batman. He later made his first present day appearance in Batman and Robin #1.
The name Professor Pyg was inspired by two Rex Harrison characters, Doctor Dolittle and Henry Higgins in My Fair Lady (a musical adaptation of the play Pygmalion by George Bernard Shaw, which was itself based around the myth of Pygmalion).
Lazlo Valentin was once an agent of Spyral and designed neo-pharmaceutical products such as the mind eroding gas compound which the crazed Dr. Dedalus uses in his final confrontation with Batman (during the events of Leviathan Strikes!).
While under the employ of Spyral, Lazlo was subjected to the very compound he created and forced into a labyrinth, of which "the only exit was via violent paranoid schizophrenia, drug abuse and D.I.Y surgery...Lazlo became Professor Pyg."
In current times Pyg is an insane scientist who turns people into "Dollotrons", things that resemble red-haired Kewpie dolls. They are his idea of "perfection". He creates them by attaching masks to their faces, masks that seal themselves onto the victim and start to transform their head. He then surgically alters them himself. They have no will of their own, only silently following Pyg's orders as he plans to make "everyone perfect".
Major Story Arcs
Pyg faces Dick Grayson and Damian Wayne in the first story arc of Batman and Robin soon after Bruce Wayne's ostensible demise. Pyg's diabolical plans are thwarted and he is apprehended.
Batman and Robin Must Die
In Batman and Robin #13, Professor Pyg is broken out of prison by the minions of El Penitente during his return to Gotham City. An army of Pyg's dollotrons attack an incapacitated Commissioner Gordon and Dick Grayson, while he is presented with a new pig mask courtesy of El Penitente. Pyg works with Doctor Hurt to tear down the Wayne family name and destroy Gotham. Pyg captures James Gordon and attempts to turn him into a dollotron, but Robin foils his plans and saves Gordon. Batman soon comes in and turns Pyg's dollotrons against him, and then brings Pyg to justice.
Pyg's first chronological appearance was in Batman #666, in a grim future where Damian Wayne was Batman and Gotham City was on the verge of the apocalypse. Pyg was a member of Damian's rogues gallery, until he was crucified upside-down on a cross by the Anti-Christ Batman.
Brave and the Bold
During "Knights of Tomorrow!" Robin is shown punching both Pyg and Flamingo. Both of these villains were introduced/prominant in to the Batman and Robin comics.
Beware the Batman
Professor Pyg will appear as a major antagonist in the animated series Beware the Batman.