Waluigi was created by Camelot artist Fumihide Aoki during the development of Mario Tennis as a rival to Luigi. There were also talks of a Princess Peach counterpart to further expand the roster. This proposed "Warupichi" character was ultimately dismissed by Shigeru Miyamoto and Nintendo because they were hesitant about making an evil version of Princess Peach, given how she was still portrayed as innocent in earlier games. According to director Yusuku Sugimoto, Nintendo then requested that Princess Daisy and Birdo be added to the game's roster as replacements, and while he claimed that at the time he was unaware that either character existed, Sugimoto nonetheless agreed to the suggestion.

Despite this, Aoki would keep the character idea around for Mario Power Tennis, featuring another rejected design that would eventually be revealed to the public in 2023, both through unused sketches and a 3D model. In one sketch, the character wields an axe, which according to Aoki, was added to make her "cute and scary". Aoki also revealed more information through Instagram comments, like how "Warupichi" was going to be the authority figure that gave orders to Wario and Waluigi, and how he wanted to make a companion to "Warupichi" that would have been an arch-rival to Yoshi that was going to be a dragon with horns and wings. The day after revealing Warupichi and the rest of this information, Aoki deleted the original posts and locked his Instagram account.