Much of the the dialogue between Wayne and Adam, such as the bedtime story and feeding time, was improvised by Rick Moranis in response to whatever Daniel Shalikar and Joshua Shalikar, the twins who played Adam, happened to say.
As a result of the film, Disney later found itself the subject of a lawsuit. The suit was filed in 1991 by Mark Goodson Productions director Paul Alter, who claimed to have come up with the idea of an oversized toddler after babysitting his granddaughter and watching her topple over building blocks. He wrote a screenplay titled "Now, That's a Baby!", which had not been made into a film but had received some sort of treatment beforehand. Alter claimed there were several similarities between the movie and his script, which consisted of the baby daughter of two scientists fall victim to a genetic experiment gone wrong instead of an enlarging ray. The case went to trial in 1993, with the jury finding in Alter's favor. Disney was forced to pay $300,000 in damages as a result.
This film was not initially intended to be a sequel to Honey, I Shrunk the Kids (1989). Originally titled "Big Baby," it was about a young toddler who grew to giant size by a freak accident involving a growth ray and eventually terrorized Las Vegas in a non-violent, yet Godzilla-esque way. Disney saw the possibilities of making this a follow up to Honey, I Shrunk the Kids and rewrote the script. Though most characters from Big Baby were rewritten as characters from Honey, I Shrunk the Kids, there was no parallel character for Amy Szalinski (Amy O'Neill). Instead of excluding the character, Amy makes a brief appearance in the beginning of the film, and it is explained that she is leaving for college.
Actor Alex Daniels portrayed Adam in his "blown-up" form (he is credited as "Uncle Yanosh"). Daniels wore a 40-pound, electronic-headed "Adam suit" for the role, and was coached on how to mimic the movements of a toddler. Once suited up on the set, Daniels had to magnify his movements so they would show through the costume's heavy, clumsy folds. Occasionally, the heat inside the outfit proved too much for its coolant system, a vest with ice water pumped through tubes, prompting crew members who noticed Daniels faltering to yell, 'Get Alex outta there!'
Was originally going to be titled "Honey, I Blew Up the Baby", but was changed due to fear of negative feedback for the title.