In 1994 James Cameron wrote an 80-page treatment for Avatar, drawing on science fiction he read as a child and a dream from his teens about a bioluminescent forest. He announced the film in 1996 but shelved it because the technology for computer-generated characters was not ready. Cameron spent years developing motion capture and refining 3D camera systems, while studios like 20th Century Fox were worried about cost overruns after Titanic. Fox eventually declined in 2006 and Disney tried to take the project, but Fox exercised its right to keep it and committed in October 2006 with a budget of $237 million. Cameron built the Na'vi from earlier paintings and designs from fantasy illustrators, and linguist Paul Frommer built their language with a lexicon of about 1,000 words. Production designers also studied real limestone formations in China for the floating mountains.

Hampi is a UNESCO World Heritage Site in Karnataka, India, with more than 1,600 surviving remains spread over 4,100 hectares. It was the capital of the Vijayanagara Empire from 1336 to 1565. Travellers from Persia and Portugal described it as a prosperous, wealthy and grand city with temples, markets and farms along the Tungabhadra River. By 1500 it was estimated to be the world's second-largest city after Beijing, and probably India's richest at the time. In 1565 a coalition of Muslim sultanates defeated the Vijayanagara Empire, its capital was conquered and destroyed, and the city was left in ruins. Hampi remains a religious centre, with the active Virupaksha Temple at its heart.