One of the oldest and most well-known rumors in the game was that the Iceberg to the northeast of Club Penguin Island could be tipped over if enough penguins stood on one side of it, or if enough penguins used the Jackhammer 3000 on the Iceberg by wearing the Hard Hat. However, this rumor was false and was never actually implemented into the game for most of its run.

From January 31 until the date of the game's shutdown on March 30, 2017, the Waddle on Party was held. As part of the celebrations, the developers decided to actually program and code the Iceberg so it could tip over. This was hinted at by one of the game's community managers, who revealed in the comments section of a blogpost detailing the Waddle on Party that "penguins could discover a special secret". The Iceberg could be tipped if at least 5 players in the room were wearing the color Blue, walking a Blue Puffle or any of its variants, and dancing while wearing a Hard Hat. If only 2 to 4 penguins fulfilled this criteria, the Iceberg would just shake. When enough penguins manage to tip it, the Iceberg would completely flip over, revealing a large dance floor, a bin of free Iceberg Tipper hats, a buoy numbered 11 frozen in the ice, and a plaque surrounded by many carvings and an inscription on it that read:

Several characters originating from books based on Club Penguin (such as the "Pick Your Path" books) were given names with less than four characters, such as "Liz", "Kip", "Deb", and "Roy". According to former artist Chris Hendricks, this was done to prevent the writers from potentially copying a real player's penguin name, which were a minimum of four characters long.

Chris Hendricks, a former artist and composer for Club Penguin, was originally against the inclusion of the game's main villain Herbert P. Bear, as he felt that Club Penguin was a game that was meant to be "safe and fun" and thus didn't need a villain. However, during development of the PSA missions, it became apparent that it was becoming difficult to put obstacles in the player's way without some sort of villain behind it. The team member who first pitched the idea of adding a villain to the game initially came up with the idea of there being three polar bears: a boss bear, a skinny vegetarian henchman bear, and a big stupid bear who would lift heavy objects and be endearing and lovable. Some staff, however, felt that this was too many bears, and eventually reached a compromise: take all the best attributes of the three bears, combine them into one bear, and give him a lovable sidekick.

Chris, however, was still concerned about the idea of adding a villain, so to both build up mystery and try to appease him, the story was developed so that the villain wouldn't be revealed until the fifth mission: in the third mission, the only evidence of the villain was white fur. This gave them a potential escape route in case players didn't want a villain in the game, as they could have the fourth mission reveal that the whole thing was a misunderstanding and that a white puffle (which hadn't debuted at that point) was to blame. As it would turn out, fans loved the idea of a villain, so the fourth mission would give a shadowy teaser of the villain, before the full reveal of Herbert P. Bear in the fifth mission. Chris would later admit that he was wrong to not want a villain in the game, as Herbert became one of his favorite characters, and led to the introduction of other memorable villains (i.e. Tusk and Ultimate Proto-Bot 10000) as well.

According to former artist Chris Hendricks, when he rendered the design of the penguin avatars into 3D, he did so with rendering shadows turned on because he thought it gave them more depth and weight. However, this came with the problem of every graphic on the model casting a shadow and needing to be individually tweaked to remove unwanted shadows. Hendricks got fed up with the tedious process and did not want to do this for every clothing item in the game, so he decided that only the penguins would cast shadows, while the clothing items would not. He claimed that in all of his time looking at fan feedback while working as a moderator for the game, nobody complained about or pointed out this design choice.

Instead of being rendered in 3D and exported in a .swf file like every other clothing item, the Ghost Costume was the only clothing item in the game where every sprite was hand-drawn by former artist Chris Hendricks. This was done because the rendering software he used at the time "would not have been able to handle a sheet".

The design of the penguins in Club Penguin were partially inspired by a panel from the American comic strip "The Far Side" that game designer Lance Priebe had clipped from a newspaper. The comic was originally published on June 8, 1994, and depicts a penguin after it slipped on a banana peel in the middle of the arctic plain. According to Priebe, the comic inspired him to use penguins, because he needed a simple character that he could animate for "an experimental project", that being the browser game Experimental Penguins, the earliest iteration of Club Penguin released in 2000.

There is an unused block button in the game files.