Universal president Carl Laemmle was so impressed by Paul Leni's Waxworks (1925), especially its blend of expressionism with humor, that he brought Leni to Hollywood to direct horror-comedy films.

Playwright John Willard initially hesitated to sell the film rights to his popular play because a movie adaptation would reveal the trick ending to a wide audience, undermining the play's ongoing box-office appeal as a stage production.

Lucien Littlefield was cast as the deranged psychiatrist Dr. Ira Lazar specifically because he bore an eerie physical resemblance to Werner Krauss's title character in The Cabinet of Dr. Caligari.

Cinematographer Gilbert Warrenton recalled that director Paul Leni used a gong to startle the actors on set in order to provoke genuine reactions of fear, joking that Leni 'beat that thing worse than the Salvation Army beat a drum.'

The film opens with a hand wiping away cobwebs to reveal the title credits, an expressionist visual technique inspired by German films like The Cabinet of Dr. Caligari.

Set designer Charles D. Hall, who built Paul Leni's sets for this film, later went on to design the iconic sets for Universal's Dracula (1931) and Frankenstein (1931).

Director Alfred Hitchcock later cited The Cat and the Canary as an influence on his own work.

The film's success established the 'old dark house' genre, later named after James Whale's The Old Dark House (1932), which was itself heavily influenced by Leni's film; other films influenced include The Last Warning, House on Haunted Hill, and various Abbott and Costello and Laurel and Hardy monster comedies.