The film was first announced in January 2010 as an untitled project when Vince Vaughn signed on for a starring role; the premise was conceived by producer Brian Grazer, Ron Howard's production partner at Imagine Entertainment, with Allan Loeb writing the script.

The Dilemma was Ron Howard's first comedy film since he directed How the Grinch Stole Christmas in 2000.

Kevin James was cast alongside Vince Vaughn in February 2010, and the film was seen as continuing Vaughn's exploration of dark relationship comedy following The Break-Up (2006) and Couples Retreat (2009), though the darker moments of the latter were cut from the final edit.

Filming took place entirely in Chicago, Illinois, from late May 2010 to mid-August 2010, on a budget of $70 million.

During production the film was known under the working titles Cheaters and What You Don't Know before Universal settled on the final title The Dilemma.

Director Ron Howard's father, actor Rance Howard, appears in the film alongside Howard's brother Clint Howard.

The trailer sparked controversy over Vince Vaughn's line joking that 'electric cars are gay,' which was first publicly criticized by journalist Anderson Cooper on his show discussing gay bullying; Universal released a new trailer without the line, but Ron Howard, who had final cut privilege, chose to keep the line in the film itself.

In a 2025 Vulture interview, Ron Howard called the film a disappointment, saying test audiences revealed that 'infidelity was not funny to people,' though he noted Channing Tatum credited the film with teaching him and audiences that he could be funny.