On May 24, 2018, That Hashtag Show reported that Walt Disney Animation Studios was developing an animated film titled Dragon Empire, which would be the directorial debut of story artists Paul Briggs and Dean Wellins, written by Kiel Murray. In October of the same year, Deadline reported that Adele Lim was hired to retouch the script, and that Osnat Shurer had been hired to produce the movie. On August 24, 2019, Disney officially announced the film during their D23 Expo Walt Disney Animation Studios' presentation panel. In August 2020, it was announced that Don Hall (director of Winnie the Pooh and Big Hero 6) and Carlos López Estrada, the latter who had joined Disney Animation in 2019, were now taking over the reins as directors, with Briggs remaining as co-director and John Ripa joining him. In addition, Qui Nguyen joined Lim as co-writer and Peter Del Vecho joined Shurer as producer.
On August 2, 2019, during the D23 Expo, Awkwafina and Cassie Steele were announced to have been cast in the film as Sisu and Raya, respectively. On August 27, 2020, it was revealed that the role of Raya had been recast, with Kelly Marie Tran replacing Steele. The recasting was due to creative shifts in the character and story.
On the eve of the film's release in March 2021, Hall finally revealed the exact reason for why the production team had decided to recast the lead role: Raya was originally a "stoic loner," but then the team began to infuse her with elements of "levity" and "swagger" similar to the character of Star-Lord in Marvel's Guardians of the Galaxy (2014). Tran was selected for her "lightness and buoyancy, but also badassery [sic]." Tran had to go through a process of learning to trust the production team, since she had participated in the original round of auditions for Raya, without success. By January 2020, when she stepped into the role formerly occupied by Steele, she was well aware that Disney Animation "had already turned her down and removed another actor from the project."
Raya and the Last Dragon was originally scheduled to be released in the United States on November 25, 2020. However, due to the COVID-19 pandemic, the film's release was delayed to March 12, 2021. On December 10, 2020, as part of Disney's Investor Day presentation, it was announced that the film's theatrical release date was pushed up by a week to March 5, 2021, along with the film being simultaneously released on Disney+ with Premier Access the same day. Raya and the Last Dragon will be available for purchase through Premier Access until May 4, 2021 (March 19 in Latin America), and will be made available for free to all subscribers on April 23 in Latin America, and on June 4 in other countries. In theaters, the film was accompanied by a new short film, Us Again.
On January 26, 2021, it was announced that Gemma Chan, Daniel Dae Kim, Sandra Oh, Benedict Wong, Izaac Wang, Thalia Tran, Alan Tudyk, Lucille Soong, Patti Harrison, and Ross Butler all have parts in the film.
James Newton Howard composed the score for Raya and the Last Dragon. The film marks the fourth time he has scored an animated film by Walt Disney Animation Studios, having previously composed for Dinosaur, Atlantis: The Lost Empire, and Treasure Planet. The score was released on February 26, 2021. Jhené Aiko wrote and performed a song for the end-credits, titled "Lead the Way".
On March 2, 2021, Disney Studios Philippines announced that Filipina singer KZ Tandingan will be singing Disney’s first-ever Filipino-language song, titled "Gabay", which means "guide" in English. The track, the Filipino version of "Lead the Way," will be part of the film's soundtrack. Allie Benedicto, studio marketing head of Disney Philippines said that "Gabay", the first-ever Disney track sung in Filipino, "demonstrates our commitment to work with local creative talents to tell our stories in a locally relevant manner." In a press release about the song's announcement, KZ Tandingan said, “I am very grateful and I feel very proud to be singing in my language, and show off its beauty to the rest of the world. I am proud to be part of history. I grew up watching Disney movies. Finally, there is a Disney Princess who I can feel a very strong connection to, and that is Raya as the first one inspired by Southeast Asia." “I love that the song reminds us that sometimes we feel we are weak, especially when we are alone, but if we just learn to trust each other, to come together, and to unite, only then are we able to change the world,” she added.
Raya and the Last Dragon was theatrically released in the United States on March 5, 2021 by Walt Disney Studios Motion Pictures in standard 2D, 3D, Dolby Cinema, and IMAX formats. The film's release was also simultaneously available on Disney+ with Premier Access, which is in response to the COVID-19 pandemic's negative impact towards theatrical releases, with many movie theaters across the United States and other countries being closed.
Raya and the Last Dragon was released on Digital HD by Walt Disney Studios Home Entertainment on April 2, 2021, with DVD, Blu-ray, and Ultra HD Blu-ray releases set to follow on May 18, 2021.