In the season two episode "Hugs Can Be Deceiving," Grace asks her sister, "Suzie, you want the Chipmunks or the Muppet Babies sleeping bag this time?" She answers, "I'll take the Muppets tonight."
In the season three episode "Finger in the Dyke," Cindy asks Taystee how she can like a song that just lists the days of the week, "like it's Sesame Street or some shit."
In the season three episode "Ching Chong Chang," Alex tells Piper that her new job is "better than being stuck down in that sweaty basement with the fucking puppets from The Dark Crystal."
Also in the season three episode "Ching Chong Chang," Alex gives Morello some bird factoids, among them the fact that Big Bird is yellow.
In the season three episode "Don't Make Me Come Back There", Diaz tells Mendoza that she left her daughter's baby in the care of her boyfriend, and Mendoza replies, "You really think that man can handle another one? It's like the Muppet Babies up in his house."