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During with her feature film partnership with Metro-Goldwyn-Mayer, Dora Wilson attempted to produce an animated film about a jackalope in early 1940, inspired by a Jackalope taxidermy she bought from a TBD store. The film, originally titled The Last Jackalope, was supposed to setting in the American Wild West, where a young cowboy finds and rescues a helpless jackalope after hunters killed his family. However, in 1942, the project was cancelled following the box office failure of Headin’ South, a year after the attack of Pearl Harbor.
In 1959, Wilson revived the jackalope project as a live-action film and changing the plot. However, after 500 rabbits are brought to the studio for the audition to play the jackalope, they weren't able to be filmed on set, especially when they were uncomfortable with fake antlers put on top their heads. Wilson realized that rabbits are complex to handling and training, as she decided that "if [they] can't film a story about a jackalope, why not draw a story about a jackalope?”, deciding to make it an animated film instead.
The production didn't start until 1964, when former Disney story man Bill Peet was brought to join to Wilson's animation studio, including the animated jackalope project, as a writer, character artist, TBD.
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For the voice acting, while many American voice actors' voice tracks were recorded at Wilson's main studio, Canadian then-child actress Susan Conway's voice track for Sally was recorded at the RCA Victor studio in Toronto. Originally, Phil Harris was suggested to voice Friendly, but was replaced by Sid Raymond (known for voicing Paramount Pictures/Harvey Comics cartoon characters such as Baby Huey and Katnip) as Harris was already casted as Baloo in Walt Disney's The Jungle Book. Veteran voice actress Verna Felton was originally chosen to voice Mrs. Applecross, but her role was passed on to June Foray due to Felton's diagnose with stroke after finishing her work in The Jungle Book.