The scene where Polly tapes up the jack in the box containing Fred was based off an actual incident that happened to a friend of co-writer/executive producer Carlos Davis named Steve Burnette. Burnette's mother Gloria had an imaginary friend when she was a little girl. But the girl's mother couldn't stand the fact that her daughter had an imaginary friend. It finally got to the point to where the Gloria's mother took her imaginary friend and flushed it down the toilet. This incident traumatized her for three years.
Robin Williams was offered the role of Drop Dead Fred, but instead chose to play Peter Banning in Hook - Capitan Uncino (1991). Rik Mayall played Drop Dead Fred instead. Mayall and Williams both died in the summer of 2014.
There's an alternate ending where Lizzie is at Mickey's house reading his daughter Natalie a bedtime story. And after a few minutes, Natalie comes out of her room where she tells both Lizzie and Mickey that her "imaginary friend" ripped up her teddy bear. Lizzie asks Natalie the name of her imaginary friend. Natalie reveals that her imaginary friend's name is Drop Dead Fred. The scene ends with a shot of a pop-up book opening revealing a pop-up illustration of Drop Dead Fred with a voice over of Fred saying "Playtime". When the film was screened for a test audience, the audience hated the ending because they hated the idea of Fred disappearing forever. This prompted New Line Cinema to cut the ending and reshoot it where Fred is seen with Natalie pulling a prank on Natalie's babysitter. The original ending was included as an extra on the 25th anniversary Blu-ray.
Paul Webster, Anthony Fingleton: Both producer and co-writer/co-executive producer uncredited appearances in the film. Webster is the guy who breaks into Lizzie's car and steals her purse, and Fingleton is one of the wine tasters at Charles' wine tasting party.