Maxis Studio One began life as a group of college friends working on a fan project called "SimBots", which would have allowed players to turn cities created in SimCity 2000 into arenas for mecha battles. Maxis caught wind of this project and hired the team, but cancelled the SimBots project. The team was instead tasked with developing the Sega Saturn port of SimCity 2000, starting in June 1994, at which point no development hardware was actually available until October. A single "Sophia" development kit was obtained in December, and development lasted until August 1995, with the port releasing in Autumn.

The Saturn port has a few technical oddities as a result of its short development time. For example, saving a single city required 461 blocks of memory (about 32 kilobytes), equivalent to virtually all of the Saturn's internal storage. Although the Saturn featured dual-CPU architecture, only a single CPU was used, causing the game to run very slowly with more complex cities.

The "zzt" sound effect that plays when you plant a new power line was recorded by series creator Will Wright with his voice initially as a placeholder, but was left in the final game as the developers liked it more than other sound effects they tried.

Many of the neighbouring towns in the game are named after characters from British Sci-Fi TV shows, most commonly Red Dwarf and Blake's 7.