Blog . Warping and Distorting Text in Adobe Illustrator
This is another Paul Trani tutorial I found here.
To warp text, type something while on the text tool. Find the little graphic near the top that looks like a map. When hovering over top, the name pops up as "Make Envelope." Select this option.
Choose "Make With Warp" and then choose how you wish to warp your text. Adjust the scales to achieve your desired effect. Make sure the "Preview" option is checked.
You can edit an applied warping. The "Edit Envelope" button looks the same as "Make Envelope," but it is on the other side of the top toolbar. Hit the button and the same adjustments pops up as before except on the toolbar instead of in it's own panel.
The text is still editable in case there may be a mistype. Double-clicking with the text tool lets you type anything as if the text was not warped. When applied, the warping reappears to the new text that was entered. This is the same for Photoshop, but the button to click is a capital "T" with a curved line underneath.