Although fans noted that Sonic Lost World had several similarities to the cancelled Sonic X-treme, such as the inclusion of tube-shaped levels, producer Takashi Iizuka stated prior to Lost World's release that X-treme "had no impact on the title."

After the development for Sonic Colors ended, a few members of Sonic Team began experimenting with a new Sonic game. During this time, Sonic Team also planned to build a game which fully utilized the 3DS' various features. Eventually, between the release of Sonic Generations and the announcement of the Wii U, development for a PC version of Sonic Lost World had fully begun. Sega eventually decided it would be best to develop the game for a Nintendo platform, considering Sonic's success on Nintendo consoles, and started to develop a Wii U version of the game, taking advantage of the Wii U's dual-screen capability and Gamepad. Once the basic stage structure and storyline was confirmed, development also began on a 3DS version of the game.

The invincibility theme in the 3DS version is actually an instrumental version of the Sonic Heroes theme song.