There are generally three ways to create a disk image (ISO) on OS X :
Disk Utility - The on-screen prompts will guide you, but it will by default create a .dmg, which is an OS X-specific file format. Disk Utility will also create an ISO (.cdr extension) if you select the "CD/DVD Master" option before creation the image. Rename the extension (to .iso) after creation if needed.
Roxio Toast - The de facto third-party standard in creating optical media on Mac OS for over a decade, it will create almost any CD or DVD format you want.
The
hdutil
command-line utility, which will, in fact, create every format that Toast supports, for free, though it is far less pretty. If you want to create an ISO with this tool, use
hdiutil makehybrid -iso -joliet -o Image.iso /input_path
There is a fourth, extremely direct command-line way using
dd
that sysadmins might know:
dd if=/dev/disk1 of=Image.iso