Daniel Knauf originally conceived Carnivàle as a feature film script between 1990 and 1992, while working unhappily as a Californian health insurance broker, but the resulting 180-page script was shelved for being too long yet still insufficient to tell the whole story.

Unable to break into the television industry, Knauf eventually posted the Carnivàle pilot script on his own website, which was forwarded to producer Howard Klein by a mutual friend, leading to HBO's interest in the project.

HBO considered Knauf too inexperienced to run the show's budget, so Ronald D. Moore was brought in as showrunner for season one; Knauf took over as showrunner when Moore left to work on the reimagined Battlestar Galactica.

The pilot episode's filming led to fourteen months of creative discussions before the second episode was shot, during which Brother Justin's role was expanded from a recurring, well-established preacher to a regular character just starting his ministry, prompting the creation of his sister Iris.

Michael J. Anderson was cast as Samson with almost no competition, as Daniel Knauf had wanted him for the role since the project's very first meetings.

The character of Sofie was originally written as a more exotic gypsy girl, but Clea DuVall landed the part after four auditions.

The show's interiors were filmed at Santa Clarita Studios while exteriors were shot around Southern California, including Paramount Ranch in Agoura Hills standing in for the town of Mintern, and Big Sky Ranch serving as the permanent season-two carnival location and Brother Justin's new home in New Canaan.

To simulate the Dust Bowl setting, smoke and dirt were continuously blown through tubes onto the set, and around 5,000 costumed extras appeared in the show's first season alone.

The opening title sequence, created by visual effects studio A52, used scanned transparencies of famous artworks up to 300 MB in size, digitally combined with stock footage of the Great Depression, and won the 2004 Emmy for Outstanding Main Title Design.

The main title theme was composed by Wendy Melvoin and Lisa Coleman of The Revolution, while the rest of the score was written by Jeff Beal, who used distinct musical styles and leitmotifs to separate Brother Justin's orchestral, religious sound from the carnival's deconstructed, mystical sound.

HBO placed Carnivàle's premiere directly after the series finale of Sex and the City to boost ratings, helping the pilot draw 5.3 million viewers, the best debut for an HBO original series at the time until Deadwood surpassed it months later.

HBO cancelled Carnivàle in May 2005 after season two ratings dropped to a third of season one's, ending what creator Daniel Knauf had planned as a six-year, three-book saga; the cancellation prompted fans to send over 50,000 emails to HBO in a single weekend.

Reviewers frequently compared Carnivàle to David Lynch's Twin Peaks, a link Knauf did not deny, while he himself compared the show's themes to John Steinbeck's The Grapes of Wrath.

In 2005, Los Angeles writer Jeff Bergquist filed a lawsuit claiming Carnivàle's creators stole the idea from his unpublished novel Beulah, a Depression-era carnival drama he had been writing since the 1980s; HBO and Knauf denied the claims as having no merit.