After the release of Rayman 3: Hoodlum Havoc, a company named Phoenix Interactive Entertainment began development on Rayman 4. The game was to feature areas from the original Rayman, including 'Band Land' and 'Picture City' along with original levels like "The Temporal Palace", and "Candy LTD." There was also a focus on a character known as "Dark Rayman", with an entire level devoted to him. Also, Rayman was to feature multiple forms like in Rayman 3: Hoodlum Havoc.

Murfy's last quote in Rayman 3: Hoodlum Havoc is "See you in Rayman 4", so it is probable that he was to appear in the cancelled Rayman 4. Or he may have been referring to Rayman 3's sequel, Hoodlum's Revenge, where he appeared.

The game originally started out as a classic adventure platformer game on the PlayStation 2 going under the name Rayman 4. When development switched to the Wii, the development team found the controls to be too different to continue making it a platformer. As such, the game was made into a party mini-game collection. Interestingly, the Game Boy Advance version of the game didn't change genres and remained a platformer.

On December 24, 2022, an anonymous user on the Internet Archive uploaded the source code for Rayman 4, the original prototype for what would later become Rayman Raving Rabbids. The Rayman 4 prototype, which was known to be a 3D Platform game with beat'em up elements that involved the Rabbids as the game's antagonists, showcases several interesting features. Some of the content featured in the E3 2006 trailer can be found in the prototype such as rideable animal companions, interchangeable costumes, combat gameplay, and explorable settings such as a forest, cave, & gear temple.

Some newer never-before-seen content includes:
• Early unfinished cutscenes some featuring a witch doctor from Rayman 3: Hoodlum Havoc.
• Explorable Rabbid bases/lairs with programmed Rabbid enemies.
• Rayman utilizing several projectile weapons.
• Other explorable worlds such as a village setting and a sphincter-inspired level.
• Rayman controlling Rabbid vehicles such as a hovercraft and large robots.
• When receiving damage, Rayman loses his clothing except for a leaf covering. This costume was repurposed as the Rayomz skin in Rayman Legends seven years later.