The play was partly inspired by an actual case in Edinburgh, Scotland in 1810, "Miss Pirie and Miss Woods vs. Dame Cumming Gordon." Two schoolteachers, Jane Pirie and Marianne Woods, were falsely accused of having a lesbian affair by a pupil, Jane Gordon. Under the influence of Jane's grandmother, Dame Cumming Gordon, the school's students were removed by their parents and the school was shut down. Pirie and Woods filed a libel suit against Dame Cumming Gordon and won the case, but given the destruction of their lives and standing in the community, it was considered a hollow victory.
Despite the changes made for the film because of censorship, nearly all of the dialogue is identical to that in the 1934 play "The Children's Hour", on which this film was based.
Lillian Hellman was satisfied with changes she had to make in the play for the film, since she felt the central issue of the play was the malicious result of the gossip rather than the gossip itself.
According to one story, possibly apocryphal, when told that the play could not be filmed as the characters were lesbians, Goldwyn is said to have exclaimed: "Well, we can make them Austrians!"
Because of the lesbian theme of the play, the Hays office refused to allow the original title to be used, nor any mention of it onscreen or in publicity materials. Hence, Lillian Hellman is credited only for original story and screenplay. The movie was briefly titled "The Lie", before it was changed to "These Three".