Craig McCracken conceived the series with his partner Lauren Faust after they adopted two dogs from an animal shelter with Mike Moon, inspiring him to adapt the concept of pet adoption to that of abandoned imaginary friends.

McCracken described the show's art style as evoking 'that period of late 60's psychedelia when Victorian stylings were coming into trippy poster designs,' and wanted Foster's to be similar to The Muppet Show, a 'fun, character driven show that the whole family could enjoy.'

The series was Cartoon Network's first show primarily animated using Adobe Flash, with animation created via Illustrator, Flash and After Effects, produced mainly in Burbank, California, with additional animation by Boulder Media in Dublin, Ireland.

Several voice actors from McCracken's previous show The Powerpuff Girls were cast in Foster's, including Tom Kane as Mr. Herriman, Tom Kenny as Eduardo, and Tara Strong as Terrence.

The theme song was composed by James L. Venable, who had previously collaborated with McCracken on The Powerpuff Girls; McCracken described the music as 'psychedelic ragtime.'

The premiere special 'House of Bloo's' was Cartoon Network's highest-rated premiere at the time it aired in 2004.

The character Wilt was formerly the imaginary friend of Jordan Michaels, a parody of basketball star Michael Jordan, and lost his arm and injured his eye while saving Jordan during a game.

During the 2008 Macy's Thanksgiving Day Parade, the characters' performance of the show's theme song was interrupted by Rick Astley singing 'Never Gonna Give You Up,' recreating the internet phenomenon of Rickrolling.

In 2006, Cartoon Network promoted the show with billboards reading lines from the series such as 'I pooted' and 'I'm a hot toe picker,' but one billboard near North Carolina A&T State University was taken down after concerns it might be associated with the university, and was replaced with a line from another Cartoon Network show, My Gym Partner's a Monkey.