Delphine Software originally pitched the idea of a basketball game to former NBA star Shaquille O'Neal, but O'Neal instead opted to pitch in the idea of a fighting game because he was a fan of Mortal Kombat. Delphine Software developed the video game using rotoscoping technology by filming Shaq and the stuntmen, then redesigning them to appear as characters in the game. A kung fu expert was then hired by Delphine Software to direct the action sequences to make the fighting aspects look more realistic.

The character roster is different between the console and handheld versions of the game. Colonel, Diesel, Leotsu, Nezu, and Auroch are omitted from the SNES, Game Gear, and Game Boy versions, whereas in the Sega Genesis and Amiga versions, the character roster is complete.

In addition, the handheld versions lack the Tournament Mode and digitized voice samples found in the console versions of the game.

According to Thierry Levastre, the game's lead graphic artist, a sequel was in development by Delphine Software, but was soon cancelled due to the poor reception of the first game. Concept art for the game was produced shortly after the game's production was cancelled.

Shaq-Fu's notoriously low quality resulted in the creation of a website known as shaqfu.com in 2001, devoted to the mission statement of destroying as many copies of Shaq-Fu as possible, with their "Reasons for LIBERATING" being listed as

The website contains stories, told through photographs, of site users visiting second-hand game shops to aqcuire copies of Shaq-Fu, a page with links to other anti-Shaq-Fu content, an archive of hate mail circa 2008, and was even updated to coincide with the announcement of Shaq-Fu: A Legend Reborn, announcing protest against the new title.

The popularity of shaqfu.com would result in the creation of a response site, www.saveshaqfu.com, devoted to purchasing and protecting copies of Shaq-Fu from the users of shaqfu.com, containing anthropomorphized bios of "rescued" Shaq-Fu cartridges.