- The film was announced on October 14, 2021, and principal photography started the same day in Vancouver.
- Director Bishal Dutta took inspiration for the film from his own childhood experience of being born in India prior to moving to North America. The story is influenced by Indian demonic mythology as well as a personal story from Dutta’s grandfather.
- The film debuted at the 2023 South by Southwest Film Festival. It Lives Inside was released in the United States on September 22, 2023, by Neon.