Treasure worked on both Gunstar Heroes and McDonald's Treasure Land Adventure at the same time, and in the end Gunstar Heroes would release before McDonald's Treasure Land Adventure. The latter game, however, was actually developed and completed first, but Treasure wanted their debut game to be an original title.

According to Treasure president Masato Maegawa, Sega of America had a role in naming Gunstar Heroes. In the original planning stages, the game was to be called "Lunatic Gunstar," but the staff felt that the term "Lunatic" gave a bad image. The next idea for a name was "Blade Gunner," with influence coming from Blade Runner. However, the name could not be copyrighted. Sega of America had already licensed the game for US release, and suggested the term "HEROES" as offering a "cool" feel. This led to the final name, although Maegawa expressed that he was unsure if "Heroes" is necessarily a cool title.