The project was originally developed in 1992 by Interscope Communications, a predecessor to Radar Pictures, with a screenplay originally written by Michael Alan Eddy, who later sued the producers in 2004 claiming he was denied credit.

The film was inspired and initially developed for nearly four years by writer and executive producer Vincent Ward, who approached several directors including Francis Ford Coppola and Peter Weir before Edward Zwick came on board.

The character of Nathan Algren is very loosely based on French Imperial Guard officers Eugène Collache and Jules Brunet, who fought alongside Enomoto Takeaki in the Boshin War, as well as on American Civil War officer Philip Kearny.

Timothy Spall's character Simon Graham is loosely based on real-life British Japanologist Ernest Mason Satow, who befriended Saigō Takamori during the Satsuma Rebellion.

Ken Watanabe's character Katsumoto is based on Saigō Takamori, leader of the real Satsuma Rebellion, though unlike Katsumoto, Takamori actually supported modernizing Japan and used firearms.

Filming took place mainly in the Taranaki region of New Zealand because Mount Taranaki resembles Mount Fuji and the area offered plenty of forest and farmland; American location manager Charlie Harrington spotted the mountain in a travel book and convinced producers to scout it.

Some scenes were also shot on the Warner Bros. Studios backlot in Burbank, California, and additional scenes were filmed in Kyoto and Himeji, Japan, for a total of 13 filming locations.

Tom Cruise performed his own stunts throughout the film.

The score was composed, arranged, and produced entirely by Hans Zimmer, performed by the Hollywood Studio Symphony and conducted by Blake Neely.

The Last Samurai grossed higher box office receipts in Japan than in the United States, becoming the highest-grossing R-rated film there at the time, surpassing The Matrix Reloaded, and earning about $132 million in Japan.