Motor Toon Grand Prix was developed in-house at SCEJ and began production under the title "Poly Poly Circuit GP". The project was directed by Kazunori Yamauchi, who stated that it was the team's goal to create realistic driving simulation without distracting from the game's enjoyment. "Basically we're not trying to fake reality – I'd rather create the sensation of handling a remote control car but with the kind of dynamics that you'd expect from a real car," Yamauchi stated. "The cars' suspensions actually work – we've attempted to simulate the dynamic forces as they go around corners." Yamauchi's development group within SCEJ later formed Polyphony Digital, the company behind the realistic racing series Gran Turismo. The character designs in Motor Toon Grand Prix were done by Japanese artist Susumu Matsushita.