This was among the last MGM films shot on the studio's renowned back lot, of which there were actually six distinct satellite parcels of land west and south of the main lot, or Lot 1. Lot 2, the last of them to serve as a working back lot, was in use until late 1978. Development for residential housing on Lots 3-6 began the year "That's Entertainment!" filmed its new material with the studio's stars strolling the various standing sets, which had been allowed to deteriorate for well over a decade before their demolition. This is particularly noticeable in the train station set where Fred Astaire gives his introduction, and Bing Crosby refers to the English Lake area as looking rather "scruffy". On the other hand, the entire purpose of the film is nostalgia, and the use of the 'scruffy' facade, clearly aged and unused, helps to set the tone as one of a brief return to the glamor of the past, even though it was all make-believe.
The movie's dedication: "Over the years, under the leadership of Louis B. Mayer and others, Metro-Goldwyn-Mayer has produced a series of musical films whose success and artistic merit remain unsurpassed in motion picture history. There were literally thousands of people... artists, craftsmen and technicians... who poured their talents into the creation of the great MGM musicals. This film is dedicated to them."
The "Good Morning" number from Singin' in the Rain (1952) was originally inserted in Debbie Reynolds's hosting segment, but eventually cut before release and later placed in That's Entertainment Part II'. The segment with Reynolds' narration can be seen in the promotional short Just One More Time.