Home Alone 3 was originally pitched at the same time as Home Alone 2: Lost in New York, with both films intended to be produced simultaneously, but those plans fell through.

Early drafts called for Macaulay Culkin to reprise the role of Kevin McCallister as a teenager, but the idea was reworked around a new cast of characters after Culkin took a hiatus from acting by 1994.

Kieran Culkin, Macaulay's younger brother who had played Kevin's cousin Fuller in the earlier films, was considered to take over the lead role, but he reportedly doubted he could live up to the phenomenon his brother had created in the previous two films.

This was the directorial debut of Raja Gosnell, who also had John Hughes writing and producing the film.

The film was shot in Chicago and Evanston, Illinois, with the opening airport scenes filmed at two different concourses of O'Hare International Airport.

Principal photography began on December 2, 1996, and concluded on March 22, 1997.

Roger Ebert gave the film 3 out of 4 stars and called it 'fresh, very funny, and better than the first two,' while his co-host Gene Siskel gave it a thumbs down, leading to a heated on-air argument where Siskel questioned if Ebert was 'okay' and Ebert retorted that he was 'better than you were the day that you liked Starship Troopers.'

Clips of the Siskel and Ebert argument over the film's review became popular on the internet in the 2020s.

The film was nominated for a Razzie for Worst Remake or Sequel at the 18th Golden Raspberry Awards, but lost to another Fox film, Speed 2: Cruise Control.