Anaheim, California - Jon Favreau teased a new Star Wars movie titled The Mandalorian & Grogu, starring Pedro Pascal and his sidekick, as Disney’s D23 kicked off with a bang!

The actor and director appeared on stage alongside The Mandalorian executive producer Dave Filoni in front of an estimated 12,000 fans at the Honda Centre in Anaheim, California, for the first day of the extravaganza.

Favreau said the new film – first mentioned in January – is in production, having started filming "a few weeks ago" ahead of its May 2026 debut.

"We are putting Star Wars back on the big screen," Filoni said, while Favreau described it as "an all new adventure following these two characters."

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A teaser clip shown to the audience saw the masked bounty hunter, played by Pascal, and baby Yoda touch fingers, while Babu Frik also makes an appearance flying a ship with Grogu.

The announcement came after Pixar's chief creative officer Pete Docter announced The Incredibles 3 was in the works.

He confirmed Brad Bird, the writer and director behind the first two films, has returned for the next adventure from the beloved undercover super-family.

It wasn't the only big news from D23, as James Cameron made a surprise appearance alongside Avatar stars Zoe Saldana and Sam Worthington to reveal the title of the third installment in the franchise: Fire and Ash.

"The new film is not what you expect, but definitely what you want," Cameron told the audience.

The 69-year-old said "we are not going to show footage today, it is too soon" but shared "cool concept art to tease your imagination" which featured the characters in the sky and surrounded by fire.

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He also teased a new character that audiences will "love to hate."

"There are new cultures and settings and creatures, and new biomes," he said. "You will see a lot more of Pandora, the planet, that you've never seen before."

The film is set for release on December 19, 2025.