Film4 Productions acquired the film rights to Alice Sebold's novel in May 2000, before the manuscript was even completed, and attached director Lynne Ramsay and producer Aimee Peyronnet's company Seaside two years before the book's publication.

Lynne Ramsay originally wrote and was set to direct the adaptation, but was eventually detached from the project because Film4 wanted a version more faithful to the novel; her script depicted Susie's heaven scenes as purely her father's imagination and had the father become friends with the killer without suspecting him.

Peter Jackson, Fran Walsh, and Philippa Boyens entered negotiations to develop the project in April 2004, and Jackson eventually sought a $65 million budget before the film was sold to DreamWorks for $70 million.

Ryan Gosling was originally cast as Jack Salmon and had gained weight and grown a beard for the role without discussing it with Jackson, but he was fired the day filming was scheduled to start and replaced by Mark Wahlberg.

Saoirse Ronan, 14 years old at the time, and her family were initially reluctant for her to take the role due to its dark subject matter, but agreed after meeting with Peter Jackson.

Stanley Tucci prepared for his role as serial killer George Harvey by watching documentaries and reading books by criminal profiler John E. Douglas, despite his wife Kate urging him against taking the part because she found the material too harrowing.

Peter Jackson cast relatively unknown actresses Rose McIver and Carolyn Dando specifically to keep them unfamiliar to audiences; Dando was working as a waitress when she was cast after a worldwide search.

Principal photography began in October 2007, filming for a few weeks in Pennsylvania counties including Delaware, Chester, and Montgomery, while most studio work took place at Stone Street Studios in New Zealand.

After test audiences said the villain's death scene was not violent enough, Jackson re-shot new footage in November 2009, while still trying to keep the film within PG-13 constraints to reach the widest audience.

Brian Eno was suggested to Jackson by Fran Walsh, a fan of his work; Jackson only intended to license two of Eno's early tracks for 1970s atmosphere but was surprised when Eno offered to compose the entire score himself.

For the film's ending song, Eno dug up a demo he had originally recorded in 1973 and reunited with the original vocalist to finally complete it for the film, joking that the song was 'finally finished in 2008.'

To create the 1973-set version of Susie's heaven, Jackson researched archives of the television show The Partridge Family for visual reference.

The British Board of Film Classification received 24 objections to the film's 12A rating, more complaints than for any other film in 2010, with viewers comparing certain scenes to those in '18'-rated horror films.