The idea for the song was partly inspired by record producer Phil Spector's plans to record a Christmas album. Wilson recalled: "I wrote the lyrics to it while I was out on a date and then I rushed home to finish the music." Some of its rhythm and structure derives from the group's "Little Deuce Coupe", also co-written by Wilson and released as a single six months earlier. Love was not originally listed as the co-writer of "Little Saint Nick". His credit was awarded after a 1990s lawsuit.
The single also reached number 69 on the regular weekly sales chart surveyed by Cashbox magazine. Despite a media-hushed Christmas in mourning for recently assassinated President John F. Kennedy, the single went into the Top Tens of Los Angeles, San Diego, Sacramento, Milwaukee, Vancouver and Washington, D.C., and the Top Twenties of San Francisco, Seattle, Minneapolis, Houston, Miami, and Springfield, Massachusetts. Eventually, over several more Christmases, it was credited as an unofficial (non-RIAA audited) million-seller.
"Little Saint Nick" reappeared on The Beach Boys' Christmas Album in 1964, with the stereo pressings of the album containing a new mix that removes the overdubbed sleigh bells and tuned percussion. This was done so that it would fit better with the sound of the album's first side, which was recorded in a hurry with basic instrumentation. Another version of the song, utilizing the melody from the All Summer Long song "Drive-In", was recorded during the album sessions but remained unreleased until a 1991 CD reissue.