Fig.: to tease or fool someone.
(informal)

Are you kidding me? I can't believe you are offering me an all-expense-paid trip around the world with you. What's behind this?

Mi stai prendendo in giro? Non è possibile che tu mi inviti a fare il giro del mondo con te a tue spese. Che cosa c'è sotto?

 “Does he really have Super Bowl tickets for free?” “Don't believe him. He's just messing with you. He has no tickets!”

“Davvero ha biglietti gratis per il Super Bowl?” “Non credergli, ti sta prendendo bellamente in giro. Non ha nessun biglietto”

Be careful what you do! I don't like to be played

Stai attento a quello che fai! Non mi piace essere preso in giro

Are you serious about wanting to pay my back rent or are you just pulling my leg?

Dici sul serio quando dici di voler pagare tutto il mio affitto arretrato o mi stai solo prendendo in giro?

Don't mess with me! You know I cannot stand it

Non prendermi in giro! Lo sai che non lo sopporto

For a moment I actually believed that his wife had royal blood, but then I realized he was pulling my leg

Per un momento ho creduto veramente che sua moglie fosse di sangue blu, ma poi ho capito che mi stava prendendo in giro

The expression first appeared in print in W.B. Churchward's "Blackbirding" in the 1880s:
"Then I shall be able to pull the leg of that chap Mike. He is always trying to do me."
The most common theory of the origin of the phrase is that by tripping a person (pulling his leg) you can make him look very foolish. It quickly evolved to mean achieving that result (making a person look foolish) regardless of the specific means used. The most popular means to do so is to tell a deliberate plausible non-truth which, if believed, would lead the person react foolishly