Director Roberto Benigni, who wrote the screenplay with Vincenzo Cerami, was inspired by the story of Rubino Romeo Salmonì and his book In the End, I Beat Hitler, which incorporates elements of irony and black comedy. Salmoni was an Italian Jew who was deported to Auschwitz, survived and was reunited with his parents, but found his brothers were murdered. Benigni stated he wished to commemorate Salmoni as a man who wished to live in the right way. He also based the story on that of his father Luigi Benigni, who was a member of the Italian Army after Italy switched to the Allied side in 1943. Luigi Benigni spent two years in a Nazi labour camp, and to avoid scaring his children, told about his experiences humorously, finding this helped him cope. Roberto Benigni explained his philosophy, "to laugh and to cry comes from the same point of the soul, no? I'm a storyteller: the crux of the matter is to reach beauty, poetry, it doesn't matter if that is comedy or tragedy. They're the same if you reach the beauty."
His friends advised against making the film, as he is a comedian and not Jewish, and the Holocaust was not of interest to his established audience. Because he is Gentile, Benigni consulted with the Center for Documentation of Contemporary Judaism, based in Milan, throughout production. Benigni incorporated historical inaccuracies in order to distinguish his story from the true Holocaust, about which he said only documentaries interviewing survivors could provide "the truth".
The film was shot in the centro storico (historic centre) of Arezzo, Tuscany. The scene where Benigni falls off a bicycle and lands on Nicoletta Braschi was shot in front of Badia delle Sante Flora e Lucilla in Arezzo.