The producers chose Knuckles the Echidna for the first Sonic spin-off series because they enjoyed his comedic portrayal in Sonic the Hedgehog 2, and wanted to release the show around the same time as Sonic the Hedgehog 3 as an homage to the Sonic the Hedgehog 3/Sonic & Knuckles double-feature release from the games.

The series was developed by the production team as if it were a third film in the franchise, though its TV budget limited the amount of screen time available for the CGI characters.

Inspirations for the series' storyline include the films Happy Gilmore, The Big Lebowski, and Kingpin, reflecting showrunner Toby Ascher's love of 90s comedies.

Idris Elba ad-libbed part of his dialogue while recording his voice performance as Knuckles.

Unlike the previous two Sonic films, which used a stand-in for Knuckles during filming, the Knuckles series used an actual puppet of the character, allowing actor Adam Pally to improvise more freely.

The series was shot back-to-back with Sonic the Hedgehog 3, with production beginning in London in April 2023 and additional filming taking place in Reno, Nevada for the final two episodes.

For the fourth episode's 'Flames of Disaster' musical sequence, director Jorma Taccone shot it like a music video over four days, including an opening sequence filmed on location in an active firing range area, which complicated shooting.

Singer Michael Bolton provided Wade's singing voice and appeared in a cameo in episode four, having been invited by director Jorma Taccone, with whom he had previously worked on The Lonely Island's 'Jack Sparrow' music video; the episode's song 'The Flames of Disaster' was written by Taccone's brother Asa Taccone and composer Matthew Compton.

To achieve movie-quality animation on a TV schedule, producers overhauled their production pipeline by hiring six animation vendors instead of one, and created an in-house rigging team shared with Sonic the Hedgehog 3 to cut costs; the series ended up containing over 300 more digital shots than the original Sonic the Hedgehog film.

In its premiere weekend, Knuckles became both the most-watched Paramount+ original series and the platform's most-watched kids and family title ever, streaming more than 4 million hours and boosting viewership of other Sonic titles on the service by 278%.