Hayao Miyazaki first wrote author Ursula K. Le Guin about adapting her book into a film. LeGuin at the time was unfamiliar with Miyazaki's work, and associated animation to be similar to Disney animation, and turned the offer down. After she saw My Neighbor Totoro (1988), she loved it, and decided to allow the movie to be made.
Hayao Miyazaki wanted to direct the film, but was busy filming Howl's Moving Castle (2004) at the time. Producer Toshio Suzuki chose Gorô Miyazaki to direct, since he was impressed by Goro's talent of making decisions quickly and properly while working in the Ghibli Museum, and his ability to draw pictures. Hayao was against Goro directing, and production was very tense.
Initially, "Earthsea" author Ursula K. Le Guin wanted Hayao Miyazaki to direct the film. At the time, however, the elder Miyazaki was tied up working on Howl's Moving Castle (2004), and thus could not come on-board at the right time. Not wanting to pass up the opportunity to make the film, Miyazaki's son Gorô Miyazaki stepped up to the plate and decided to make this his first film.
Parts of the film were inspired by and borrowed heavily from Hayao Miyazaki's graphic novel, The Journey of Shauna. Hayao also re-used elements from his book for his own directorial efforts, such as Princess Mononoke (1997) and Nausicaä of the Valley of the Wind (1984).