The idea for the show came from an episode of It's Garry Shandling's Show in which Shandling was a guest on an LA morning show; he realized he could make a talk show look real enough to slowly draw the audience into the realities of life 'behind the curtain'.

Garry Shandling was a frequent guest host of The Tonight Show and was considered a possible successor to Johnny Carson, but after Jay Leno got the job in 1992, Shandling turned down his own offered late-night talk show slot to create The Larry Sanders Show instead.

Jeremy Piven grew tired of playing writer Jerry because the character lacked development, and he was written out during the season 2 episode 'Larry's Birthday'; Wallace Langham's character Phil then became head writer.

Linda Doucett, who played Darlene, had been in a six-year relationship with Garry Shandling; after they became estranged she was written out of the show and later sued Shandling and producer Brad Grey's company for sexual harassment and wrongful termination, settling out of court for $1 million.

Janeane Garofalo left the show during season 5 because her character Paula was getting decreasing screen time, and was replaced as talent booker by Mary Lynn Rajskub's character Mary Lou.

The behind-the-scenes segments were shot on film with hand-held cameras in a documentary style, while the talk-show-within-the-show was recorded with four video cameras to give it a brighter look, helping visually distinguish the two settings; the talk show was filmed before a live studio audience during the first season.

Early episodes were shot with both cable-friendly and broadcast-safe language until midway through the second season, when the actors resisted doing the extra syndication-safe takes.

Radio host Howard Stern later adopted 'Hey now!' as his on-air catchphrase, stating it was a deliberate homage to Hank Kingsley and the series.

Garry Shandling filed a $100 million lawsuit against his manager Brad Grey in January 1998 after their relationship broke down over writers leaving the show for other Brillstein-Grey productions; the suit was later settled out of court for $10 million.

In the series finale, Larry interviews Sean Penn who, after cutting to a commercial break, gossips about Shandling's real-life behavior on the set of the film Hurlyburly, in which Shandling, Penn, and Penn's wife Robin Wright all appeared.

The finale aired 16 days after the Seinfeld series finale and drew 2.5 million viewers, a significant number for HBO, with critics giving it markedly more positive reviews than Seinfeld's ending; Jerry Seinfeld himself made a guest appearance in the episode.

Linda Doucett, who played Darlene, actually posed for Playboy magazine's September 1993 issue, mirroring a storyline in the season 2 episode 'Broadcast Nudes' where Hank pressures her character to do the same.