The concept of Billy & Mandy originated from a two-minute 1995 thesis short film Maxwell Atoms made at the University of the Arts in Philadelphia, called 'Billy and Mandy in: The Trepanation of the Skull and You,' which wasn't publicly shown until 2016.

The characters Billy and Mandy came from a rejected pitch Atoms made to Hanna-Barbera for a superhero milk carton show called 'Milkman'; executives liked the two children characters from that pitch instead and asked him to build a series around them.

Atoms originally wanted Mandy to befriend the Devil rather than the Grim Reaper, but he chose the Reaper because Cartoon Network did not want depictions of the devil after Cow and Chicken.

The show was greenlit for full production after winning Cartoon Network's viewer poll event 'Big Pick' (held June-August 2000) with 57% of the vote, beating out Whatever Happened to... Robot Jones? and Longhair and Doubledome.

The series originally aired as part of Grim & Evil alongside Evil Con Carne, but Cartoon Network split the two into separate half-hour shows in 2003 and later asked Atoms to choose one to continue; he picked Billy & Mandy since running both was too stressful.

Creator Maxwell Atoms, who was diagnosed with Asperger syndrome as an adult, said the show's three main characters reflect the autism spectrum: Mandy represents his cold rational survival mode, Billy represents his joyous inner world, and Grim acts as the moral mediator between them.

Cartoon Network once had plans for a spinoff series called Cheeseburger, featuring Fred Fredburger and Cheese from Foster's Home for Imaginary Friends, but the idea never moved forward, as revealed by Craig McCracken in 2022.

The episode 'Little Rock of Horrors,' a parody of Little Shop of Horrors, features an original song titled 'Brains!' by Aurelio Voltaire, while the TV movie Big Boogey Adventure opens with his song 'Land of the Dead'; both tracks appear on the album Spooky Songs For Creepy Kids.

The end credits of the special 'Billy & Mandy Save Christmas' use the glam metal band Ratt's song 'Round and Round.'