Arndt is also well known for his second screenplay from the film Toy Story 3, for which he also received multiple awards and nominations including a nomination for the Academy Award for Best Adapted Screenplay. This made Arndt the first screenwriter ever to be nominated for both the Academy Award for Best Original Screenplay and Best Adapted Screenplay for his first two screenplays.
"I figured I’d probably write 50 scripts in my life. Out of those 50, I figured maybe five would be produced, and that maybe one or two would be successful. So I always kind of expected I’d write at least one successful film in my life. [...] The way it all came together was kind of like Murphy's law in reverse—I don’t expect that kind of experience again any time soon."
Arndt wrote the first draft of Little Miss Sunshine in three days between May 23–26, 2000. From that initial draft, he made approximately 100 revisions over the course of a year, requesting input from friends and family. Arndt considered directing the film himself "as a no-budget, DV feature" due to his concern of the story being "just too small and "indie" to get any real attention from Hollywood". After the Endeavor Talent Agency read the script in July 2001, however, producers Albert Berger and Ron Yerxa subsequently gave the script to commercial and music video directors Jonathan Dayton and Valerie Faris, who were immediately attracted to the project. Dayton and Faris were signed on by producer Marc Turtletaub, who purchased the script from Arndt for $250,000, on December 21, 2001.