The development of The Simpsons: Hit & Run was influenced by a lawsuit filed by Sega alleging that The Simpsons: Road Rage too closely resembled Crazy Taxi. They eventually settled out of court, but this prompted developer Radical Entertainment to change the direction of its next Simpsons title from another vehicle-focused driving game to a fully open-world action-adventure game. Despite this shift happening late in development, they successfully integrated new mechanics like on-foot gameplay into the overall experience, though traces remained, such as the absence of enemies when on-foot, and the use of fade-to-black transitions for entering or exiting most vehicles to avoid creating more animations.

To secure the Simpsons license, Radical proposed an aggressive 16-month production schedule, which quickly proved unrealistic as they had no existing assets to build upon. The project fell behind before the first prototype was playable and missed multiple milestones, creating a stressful work environment marked by extended overtime and declining morale. Communication problems between departments reportedly caused internal builds to become so unstable that they were sometimes effectively unplayable for weeks. According to later accounts, Radical did not immediately inform Fox Interactive about the delays, but they disagreed over aspects of the game's design and content. Time constraints forced Radical to downsize levels and cut planned content, including two complete levels that still have remnants within the game's files, a food meter and turbo meter, and two boss battles. New bonus missions and collectible cards were introduced to replace or supplement the cut content, but even after these revisions, they needed more time to polish the game, and changes reportedly continued almost until release.

Meanwhile, publisher Vivendi Universal chose to minimize development costs for the GameCube version because of its comparatively smaller install base, assigning the entire port to lead programmer Cary Brisebois. With only a few weeks to complete the task, he successfully ported the game to the GameCube almost entirely on his own, although these constraints contributed to more unfinished elements and technical shortcomings.