Sinbad improvised the majority of his lines. Arnold Schwarzenegger also improvised many of his responses in his conversations with him.
The story is based on the 1980s shopping frenzy over the Cabbage Patch dolls. However, it ended up perfectly mimicking the Tickle Me Elmo craze of Christmas 1996.
In March 2001, a U.S. District Court jury in Birmingham, Michigan ruled that 20th Century Fox stole the script idea from Detroit high school biology teacher Brian Webster. The studio was ordered to pay $19 million, later reduced to $1.5 million. Webster submitted the script, called "Could This Be Christmas?", to the studio in 1994, and never received payment nor credit despite the film making $129 million worldwide. The studio appealed, claiming Webster's script was submitted after they had purchased a treatment (summary or outline) of what would become this movie's script, and the verdict was reversed.
In contrast to their characters, both Arnold Schwarzenegger and Rita Wilson got along very well with Phil Hartman off-camera. They found him to be very warm and friendly, and considered him a delight to work with.
The world premiere was held on November 16, 1996 at the Mall of America in Bloomington where parts of the film were shot. A day of events was held to celebrate the film's release and Arnold Schwarzenegger donated memorabilia from the film to the Mall's Planet Hollywood.