The movie caught the attention of American animation historian Charles Solomon, who convinced Disney to hire director Marcell Jankovics for their proposed animated musical epic "Kingdom of the Sun". Due to numerous production hurdles this project was abandoned, and the comedy The Emperor's New Groove (2000) was made instead. Though he was not involved with the finished work, Jankovics still received a production credit. He claims he absolutely hated the film because it had nothing to do with the original idea of a serious mythological epic, calling it a "horrendous, Las Vegas-style comedy show". He accepted the offer to work on the project mainly to fund his own film, The Tragedy of Man (2011), though he claimed to have made a couple friends at Disney and stole some of their colored pencils when no one was looking.
Marcell Jankovics deliberately avoided adding black contour lines to the characters, as he felt that these always made animated characters stand out from the background. He was looking to unify environment and character art. Art historian, folk mythology analyst and alternate history conspiracy theorist Gábor Pap, with whom Jankovics had consulted during production, saw this as a huge mistake. He argued that clear line-work is an inextricable part of folk art, and by abandoning it, the movie detached itself from its source material. Pap would go on to deride the movie in his writings, saying it had flopped for a good reason.
According to the director, the animation crew had to work under horrible conditions. Their work building was a rickety wooden construction added to the main studio building. Concept art and other production papers were carelessly littered across the floor and trampled over, as the studio saw no point in preserving them. The celluloid sheets were scratchy and of low quality, and the paint had a tendency to form clumps and crumble off the cels after drying. At one point, 600 completed animation cels had to be thrown out and hastily redone because they were unusable. The animators eventually decided to start manufacturing their own paint, and Jankovics himself helped out with painting the cels. He recalls that the work was so stressful, one of the artists broke out in tears. To buy more production equipment that Pannonia Studio couldn't afford, the people working on the film even had to take up additional jobs elsewhere.
Marcell Jankovics has often been asked if he had taken drugs during production. He found such questions annoying, as his goal was not to make the film psychedelic or "trippy", but to pay respect to the cultural symbolism of the folk mythology it's based on. He argued that most old cultures had their own system of symbols and allegorical tales that would seem bizarre to modern eyes, especially to people with different cultural backgrounds. He also admitted he took no mind altering substances and objected to the word "psychedelic" - he described the movie as dreamlike or surreal instead. His subsequent theatrical films produced decades later, Ének a csodaszarvasról (2002) and The Tragedy of Man (2011), also featured similarly unique visuals and were likewise made without drugs.
The movie is a pastiche of many similar Hungarian and Eurasian folk tales and owes much to the myths of ancient Magyars, Scythians and Avarians. According to the Hungarian Ethnographic Lexicon, there are at least 50 different forms of this story, but the film was mostly based on "Fehérlófia" (as penned by poet László Arany) and "Fanyüvö, Vasgyúró, Hegyhengergetö" (by Gyula Illyés). One common criticism against the film is that the story, characters and its perceived messages are different from Arany's version of Fehérlófia. Director Marcell Jankovics confirmed that his aim wasn't to make a faithful adaptation of any single fable, but to create his own version. Most of the differences between the versions are detailed in the movie's FAQ section, but here are some notable ones:
- In Arany's version, Fehérlófia (Son of the White Mare) and Fanyüvö (Treeshaker or Treetearer) are separate characters, and Fehérlófia kills all three of his servants, including the weak Fanyüvö at the end for their betrayal. In Illyés's version, Fanyüvö is the powerful main hero who only has two companions whom he spares at the end, but he has human parents. The film meshes these two into one and even combines their names: Fanyüvö Fehérlófia. Jankovics stated he had based the characters more on the story's second version because he believed viewers would be bored if each task had to be repeated four rather than three times.
- Other differences include expanding on the backstory of the world, its rulers, the princesses and the dragons, and combining the fable with the myth of the World Tree. In most other versions of the tale, none of these have any background. The film's first 14 or so minutes are not part of the stories, this scene was a unique addition.
- In the film, Fehérlófia's parents are deities, the Rain King and the Snow Queen, and the Hétszünyö Kapanyányimonyók (Seven-Hearted Lobahobgoblin) is the King in disguise. The folk tales contain no such connotations; the Goblin is a villain, and the King is a human unrelated to the main characters.
- Depending on the version, the hero's mother is either a human woman or a horse without an explicit backstory, though sometimes, she's a cow or a sheep.
- Certain scenes or quotes were also taken from other versions of the tale. In specific, the scene of Vasgyúró (alternatively named Ironkneader, Ironrubber or Irontemperer in English) forging a sword for Fanyüvö adapts the creation scene of Vasgyúró's ax that was left out from the film.