Wereworms were mythical creatures told of in the stories of hobbits. The were-worms were supposedly terrible monsters that made their home in the Last Desert very far east of the Shire. In the tales of The Hobbit, the Wereworms were likened to Dragons and serpents. To Hobbits they were memories of creatures that stalked the Earth during the wars of Beleriand.
In the early drafts of the book, J R R Tolkien had associated these wereworms with the Gobi Desert.
Adaptations
These creatures appeared in The Hobbit: The Battle of the Five Armies. Apparently they were used only for tunneling, and not for fighting, because they did not take part in the ensuing battle.
References
Wereworms Wikipedia(Text) CC BY-SA