Universal Pictures once held an option on the film rights to the animated series in 1993, with Ivan Reitman signed on to produce and a script by Jeph Loeb and Matthew Weisman. The project moved to Disney when the studio bought out DIC Entertainment.

Peter and Bobby Farrelly were at one point considered to write and direct the film before David Kellogg, known for The Adventures of Seinfeld & Superman commercials and the Vanilla Ice film Cool as Ice, was hired.

Cameron Diaz turned down the role of Dr. Brenda Bradford to instead appear in Any Given Sunday, and Brendan Fraser declined the title role because he was already working on another live-action Disney cartoon adaptation, George of the Jungle.

Many stars were considered for Inspector Gadget, including Kevin Kline, Steve Carell, Tom Hanks, Tim Allen, Mike Myers, Jerry Seinfeld, Mel Gibson, Michael Keaton, Adam Sandler and Robin Williams; Steven Spielberg, while weighing an executive producer role, favored Chevy Chase or Steve Martin, while the Farrelly brothers wanted Jim Carrey.

Lindsay Lohan turned down the role of Penny because she was filming The Parent Trap, and actors considered for the voice of the Gadgetmobile included Eddie Murphy, David Alan Grier and Chris Tucker.

Several well-known actors were considered for Dr. Claw, including Tim Curry, James Earl Jones, Willem Dafoe, Jack Nicholson, John Lithgow, Tommy Lee Jones and Dennis Hopper. Comedian Louis C.K. also auditioned for a small role as a police officer.

Principal photography began on July 22, 1998 and wrapped on October 18, taking place in Pittsburgh, Baton Rouge and Los Angeles, with the castle-like main tower of Pittsburgh's PPG Place serving as a central filming location.

The film is dedicated to production designer Michael White, who died on January 19, 1999 in Los Angeles at age 36 during the film's production.

Stan Winston, the renowned effects artist, was responsible for the practical, animatronic, and makeup effects in the film.

After a test screening, the film was cut down from an original 110-minute version to just 78 minutes.

During the end-credits 'Minions Anonymous' scene, henchmen cameos include Mr. T and Richard Kiel, who is credited as the 'Famous Bad Guy with Silver Teeth' in reference to his role as James Bond villain Jaws.

The Gadgetmobile in the film is depicted as a white and chrome 1962 Lincoln Continental convertible, rather than the Matra Murena/Toyota Supra hybrid seen in the original cartoon, and unlike the cartoon version it cannot transform from a minivan into a police vehicle.