After finding success with Hollywood Shuffle and I'm Gonna Git You Sucka, Keenen Ivory Wayans was approached by Fox to create his own show, and he pitched a variety series similar to Saturday Night Live but with a cast of people of color willing to take risks with content.

Damon Wayans had been a cast member on Saturday Night Live during its 11th season but was fired after going rogue on a sketch due to frustration with his lack of creative freedom and screen time.

Cast member T'Keyah Crystal Keymáh was discovered performing her act in the lobby of a theater in Chicago, as Wayans sought minority talent outside traditional venues like the Comedy Store and Improv clubs.

Kim Coles, one of the original nine cast members, was fired after the first season, later learning that Wayans felt she was not versatile enough.

Only four cast members appeared in all five seasons: T'Keyah Crystal Keymáh, David Alan Grier, Tommy Davidson, and Jim Carrey, though Carrey's fifth-season appearances were limited because he was simultaneously filming The Mask and Ace Ventura: Pet Detective throughout 1993.

Jim Carrey had auditioned for Saturday Night Live for both its 1980–1981 season (losing out to Charles Rocket) and its 1985–1986 season, but backed out of the latter after witnessing a man threatening to jump from 30 Rockefeller Center, fearing the stress of the show could drive him to suicide.

The show's original exotic-looking logo had to be changed to a simpler three-color lettering design after the band Living Colour sued, claiming the show had stolen the band's logo and name.

For the 1992 Super Bowl, Fox aired a special live episode of In Living Color as counterprogramming against CBS's Super Bowl halftime show, drawing 20 million viewers and reportedly prompting the NFL to start booking A-list halftime acts, beginning with Michael Jackson the following year.

Future Fly Girls dancer Carrie Ann Inaba later became a choreographer and judge on Dancing with the Stars, while fellow Fly Girl Jennifer Lopez, who joined in the third season, went on to become a major Latina actress and singer.

The FXX broadcast version of the show restored previously censored music video parodies and song references, but still edits out certain sketches, including a line referencing the 1993 World Trade Center bombing in a Fire Marshall Bill sketch, due to sensitivities following the September 11 attacks.

Keenen Ivory Wayans stopped appearing in sketches after the third season amid disputes with Fox over creative control and censorship, and Damon, Marlon, Shawn, and Kim Wayans all subsequently left the show as well, largely in solidarity with Keenen.

Pop singer Bruno Mars paid tribute to In Living Color in the music video for his 2018 single 'Finesse'.