In the early 1990s, Super Mario creator Shigeru Miyamoto conceived a 3D Mario design while developing the game Star Fox (1993) for the Super Nintendo Entertainment System. Star Fox used the Super FX graphics chip, which added more processing power; Miyamoto considered using the chip to develop a Super NES game, Super Mario FX, with gameplay based on "an entire world in miniature, like miniature trains". According to engineer Dylan Cuthbert, who worked on Star Fox, Super Mario FX was never the title of a game, but was the codename of the Super FX chip itself. Miyamoto reformulated the idea for the Nintendo 64, not for its greater power, but because its controller has more buttons for gameplay. At the January 1993 Consumer Electronics Show (CES), where Star Fox made its debut, Nintendo's booth demonstrated a talking 3D polygon animation of Mario's head; it returned in the start screen, programmed by Giles Goddard.

A generic square placeholder image with rounded corners in a figure.
Director Shigeru Miyamoto
A generic square placeholder image with rounded corners in a figure.
Assistant director Yoshiaki Koizumi

In the early 1990s, Super Mario creator Shigeru Miyamoto conceived a 3D Mario design while developing the game Star Fox (1993) for the Super Nintendo Entertainment System. Star Fox used the Super FX graphics chip, which added more processing power; Miyamoto considered using the chip to develop a Super NES game, Super Mario FX, with gameplay based on "an entire world in miniature, like miniature trains". According to engineer Dylan Cuthbert, who worked on Star Fox, Super Mario FX was never the title of a game, but was the codename of the Super FX chip itself. Miyamoto reformulated the idea for the Nintendo 64, not for its greater power, but because its controller has more buttons for gameplay. At the January 1993 Consumer Electronics Show (CES), where Star Fox made its debut, Nintendo's booth demonstrated a talking 3D polygon animation of Mario's head; it returned in the start screen, programmed by Giles Goddard.

Production of Super Mario 64 began on September 7, 1994, at Nintendo's Entertainment Analysis & Development division, and concluded on May 20, 1996. According to Miyamoto, the development team consisted of around fifteen to twenty people. Development began with the characters and the camera system; months were spent selecting a view and layout. The original concept involved the fixed path of an isometric game such as Super Mario RPG, which moved to a free-roaming 3D design, with some linear paths, particularly to coerce the player into Bowser's lair, according to Giles Goddard.

Super Mario 64 is one of the first games for which Nintendo produced its illustrations internally instead of by outsourcing. The graphics were made using N-World, a Silicon Graphics (SGI)-based toolkit. The development team prioritized Mario's movement and, before levels were created, tested and refined Mario's animations on a simple grid. The 3D illustrations were created by Shigefumi Hino, Hisashi Nogami, Hideki Fujii, Tomoaki Kuroume, and Yusuke Nakano, and the game was animated by co-director Yoshiaki Koizumi and Satoru Takiwaza. Yōichi Kotabe, illustrator and character designer for the Mario series, made a 3D drawing of Mario from various angles and directed the creation of the character models. In an interview with The Washington Post, Yoshiaki Koizumi recalled that his challenge was animating the 3D models without any precedents. To assist players with depth perception, the team positioned a faux shadow directly beneath each object regardless of the area's lighting. Yoshiaki Koizumi described the feature as an "iron-clad necessity" which "might not be realistic, but it's much easier to play".

Miyamoto's guiding design philosophy was to include more details than earlier games by using the Nintendo 64's power to feature "all the emotions of the characters". He likened the game's style to a 3D interactive cartoon. Some details were inspired by the developers' personal lives; for example, the Boos are based on assistant director Takashi Tezuka's wife, who, as Miyamoto explained, "is very quiet normally, but one day she exploded, maddened by all the time Tezuka spent at work".

Super Mario 64 was first run on an SGI Onyx emulator, which only emulated the console's application programming interface and not its hardware. The first test scenario for controls and physics involved Mario interacting with a golden rabbit, named "MIPS" after the Nintendo 64's MIPS architecture processors; the rabbit was included in the final game as a Power Star holder. Super Mario 64 features more puzzles than earlier Mario games. It was developed simultaneously with The Legend of Zelda: Ocarina of Time but, as Ocarina of Time was released more than two years later, some puzzles were taken for Super Mario 64. The developers tried to include a multiplayer cooperative mode, whereby players would control Mario and his brother Luigi in split-screen. Nevertheless, hardware constraints and the developers' inability to implement the mode satisfactorily led to its removal.