Sesame Workshop sued the team behind the film for the tagline, "No sesame. All street," claiming that the film tarnishes their reputation. The suit was rejected on May 30, 2018. Soon after, STX issued a brief statement, "We fluffing love Sesame Street (1969) and we're obviously very pleased that the ruling reinforced what STX's intention was from the very beginning - to honor the heritage of The Jim Henson Company's previous award-winning creations while drawing a clear distinction between any Muppets or Sesame Street characters and the new world Brian Henson and team created. We believe we accomplished that with the very straightforward NO SESAME, ALL STREET tagline. We look forward to continued happytimes as we prepare to release Happytime Murders this summer." Some TV spots for the film started with "From the studio that was sued by Sesame Street..."
A total of 125 puppets are in the film, with 40 specifically created for it. All of the sets were built so that puppeteers could stand on the floor and operate the puppets as if they were standing with straight arms. The floor of the sets came up in pieces, so the human actors had a two-foot margin to stay on their path.
Officer Donny, the cop, is Melissa McCarthy's real-life husband, Ben Falcone. The couple has appeared in several movies together including: The Nines (2007), Bridesmaids (2011), Identity Thief (2013), The Heat (2013), Tammy (2014), Spy (2015) and The Boss (2016), The Life of The Party (2018).
Brian Henson's worst day on set was when he had to play Crab. He had to be inside a trash can so that he could direct while operating and voice Crab. While he was in there, he suddenly felt something cold and liquid creeping down his back. A crew member who thought it was a real trash can had carelessly thrown in a half-full bottle of beer.