Mitch MacAfee (Morrow), a civil aeronautical engineer, while engaged in a radar test flight near the North Pole, spots an unidentified flying object. Three jet fighter aircraft are scrambled to pursue and identify the object but one aircraft goes missing. Officials are initially angry at MacAfee over the loss of a pilot and jet over what they believe to be a hoax.
When MacAfee and mathematician Sally Caldwell (Corday) fly back to New York, their aircraft also comes under attack by a UFO. With their pilot dead, they crash-land in the Adirondacks, where Pierre Broussard (Lou Merrill), a French-Canadian farmer, comes to their rescue. MacAfee's report is met with bewilderment and skepticism, but the military authorities are forced to take his story seriously after several more aircraft disappear. They discover that a gigantic bird "as big as a battleship", purported to come from an antimatter galaxy, is responsible for all the incidents. MacAfee, Caldwell, Dr. Karol Noymann (Edgar Barrier), Gen. Considine (Morris Ankrum), and Gen. Van Buskirk (Robert Shayne) work feverishly to develop a way to defeat the seemingly invincible creature.
The climactic showdown takes place in Manhattan, when the gigantic bird attacks both the Empire State Building and United Nations buildings. It is defeated by a special type of isotope, deployed from the tail gun position of a B-25 bomber aircraft, which successfully collapses the creature's antimatter shield and allows missiles to hit and kill the monster. The giant bird plummets into the Atlantic Ocean outside New York, and the last sight of it is a claw sinking beneath the ocean.
According to Richard Harland Smith of Turner Classic Movies, the inspiration for the story may have been taken from media reports about scientific discoveries in the field of particle physics, dealing with matter and antimatter. Other influences included the Japanese film Rodan (1956), and the Samuel Hopkins Adams story "Grandfather and a Winter's Tale", about la Carcagne, the mythical bird-like banshee from French-Canadian folklore. The Hopkins story was published in The New Yorker in January 1951.
A character in The Giant Claw mistakes the menacing bird for la Carcagne, said to be a monster resembling a giant woman with a wolf's head and bat-like black wings and which, like the banshee, is a harbinger of death.
Under the working title Mark of the Claw, principal photography took place at Griffith Park, subbing for the New York-Canada border, with interiors filmed at the Columbia Annex near Monogram Studios from February 1–20, 1957. Katzman originally planned to utilize stop motion effects by Ray Harryhausen, but due to budget constraints, he instead hired a low-budget special effects studio in Mexico City, Mexico to create the mythical creature that would be the showpiece of the production. The result, however, was a poorly-made "marionette".
Morrow later confessed in an interview that no one in the film knew what the titular monster looked like until the film's premiere. Morrow himself first saw the film in his hometown, and hearing the audience laugh every time the monster appeared on screen, he left the theater early, embarrassed that anyone there might recognize him (he allegedly went home and began drinking).
Critical reception was very negative, with Bill Warren of The New York Times later commenting, "This would have been an ordinarily bad movie of its type, with a good performance by Jeff Morrow, if the special effects had been industry standard for the time. That, however, is not what happened. The Claw is not just badly rendered, it is hilariously rendered, resembling nothing so much as Warner Bros. cartoon-character Beaky Buzzard. Once seen, you will never forget this awesomely silly creation".
The Giant Claw has been mocked for the quality of its special effects. The menacing bird, in particular, is considered by many to be badly made, being a puppet with a very odd face. Film critic Leonard Maltin noted that the film disappointed for those reasons, "(a) lack of decent special effects ruins the running battle between colossal bird and fighter jets. Big bird is laughable". TV Guide panned the film, awarding it a score of 1 out of 4, criticizing the film's monster as "preposterous-looking".
Not all reviews of the film were negative. Allmovie gave the film a positive review, stating, "The Giant Claw has a terrible reputation that isn't entirely deserved – to be sure, producer Sam Katzman opted for the cheapest, worst-looking monster that one could imagine, a ridiculous-looking giant bird puppet that makes the movie seem ludicrous. But except for those moments when the title monster is on the screen, the movie isn't bad – so for the first 27 minutes, until it appears for the first time and evokes its first rounds of laughter, the picture is working just fine within the confines of its budget, script, and cast". Allmovie also complimented Morrow's performance as "the best thing in the picture".
The Giant Claw had been a staple of the bootleg video market, with only two official VHS releases (one in the USA by Goodtimes Home Video and the other by Screamtime in the United Kingdom).
In October 2007, Sony Pictures Home Entertainment released the film on DVD as part of the two-disc, four-film set, Icons of Horror Collection: Sam Katzman, along with three other films produced by Katzman: Creature with the Atom Brain (1955), The Werewolf (1956) and Zombies of Mora Tau (1957).