In 2018, on the Discord channel of the Japanese gaming blog Gamecast, an anonymous former Sega AM2 developer revealed a previously-unknown Easter egg where at the end of the quick-time event at the New Yokosuka Harbor, if you input Hado Hado + A within 3 frames, you will perform a Shin Shōryūken as used by Ryu in Street Fighter III two years prior to Shenmue's release (Note that "Hado Hado" (or 236 236) refers to performing the command for the Hadoken move from Street Fighter by moving the D-pad down, down-right, right in rapid succession, twice in a row).

The developers had originally planned to include this in the game as a tribute, but producer Yu Suzuki stepped in and disabled it from being useable in the final release. For the average player to make the move, it takes 6 frames to perform, but the game lowers the window to successfully perform it to 3 frames, making it impossible to perform under normal circumstances. However, the secret itself was not removed, and would later be discovered and executed by a modder in 2019.

When asked why the Easter egg was added in the first place, the developer added:

"Although we were employees at Sega, we were far from staid workers, and all we wanted to do was make our games fun. We told ourselves we mustn't ever lose that way of thinking.

We attributed a minimum number of various events in parallel to all the characters, so even if the ending is the same, the path to get there will be different for every player. We were trying to do something like that. Quite different from multiple endings. The main story alone was followed without exception, but at the same time we wanted to give all the players a differing experience."
Contributed by MehDeletingLater
The "Orphaned kitten" was based on game's interior designer Manabu Takimoto's cat "Sasuke". During development, a game designer came by to Manabu's desk and ask to borrow the picture of "Sasuke" when he was a kitten.

Game's producer Yu Suzuki stated, "Ah, I remember that. We called him Sasuke during the planning phase too. We knew it had been modeled after Takimoto’s cat, so we wanted to leave the name as Sasuke, as a remnant of that. (laughs) But eventually someone was like, “Who named this cat Sasuke?!” and we had to change it. (laughs)". In the final version of the game, the "Orphaned kitten's" gender is now female, instead.

In the game's cutscene, "Ryo Hazuki" and "Megumi Mishima" talk about naming the "Orphaned kitten". There's an option to select Manabu's cat's name "Sasuke", if players choose "Sasuke", Ryo will say "So she can grow up to be big and strong like a ninja", but Megumi will not like it, because it's a boy's name. This name cannot be used, as it will result her name to be defaulted as Mimi.
Contributed by ProtoSnake
The Nightfall theme in Shenmue is an arrangement of the song "Outride a Crisis" from one of Yu Suzuki's previous games, Super Hang-On.
Contributed by MyAliasIsIan
There is a hidden image inside Xiuying's eyes that acts as the reflection, presumably representing a generic "player" that she is looking at.
The texture for her face is also mirrored on the back of her head, hidden under her hair.
Contributed by ABOhiccups
During the early stages of development, Shenmue featured a bicycle that could have been used to quickly transverse town.
Contributed by CosmykTheDolfyn
In Ryo's house, under the TV in the main room is a cupboard containing a Sega Saturn. The game is set in 1986, which is about 8 years before the release of the Sega Saturn. This is a reference to the fact that Shenmue was originally designed to be on the Saturn.
Contributed by retrolinkx
Shenmue began development on the SEGA Saturn, and was later reworked for the SEGA Dreamcast. The lengthy development process is one reason the game cost $47 million to make. It was previously thought to cost $70 million, but that was said to be an exaggeration. At the time of its release, it was the most expensive development process in history. The current record belongs to Grand Theft Auto IV, costing around $100 million to develop.
Contributed by retrolinkx