The initial idea for Kingdom Hearts began with a discussion

The initial idea for Kingdom Hearts began with a discussion between Shinji Hashimoto and Hironobu Sakaguchi about Super Mario 64.[103] They were planning to make a game with freedom of movement in three dimensions like Super Mario 64 but lamented that only characters as popular as Disney's could rival a Mario game. Tetsuya Nomura, overhearing their conversation, volunteered to lead the project and the two producers agreed to let him direct.[103] A chance meeting between Hashimoto and a Disney executive in an elevator—Square and Disney had previously worked in the same building Cosplay Costumes in Japan—allowed Hashimoto to pitch the idea directly to Disney.[104][105] Development began in February 2000 with Nomura as director and Hashimoto as producer.[106] While Nomura had done previous work in the Final Fantasy series as monster designer and graphic director, he did not gain widespread recognition until he was the lead character designer for Final Fantasy VII. Kingdom Hearts marked his transition into a directorial position, though he also served as the game's character designer.

 Scenarios were provided by Kazushige Nojima who was a scenario writer for Square from Final Fantasy VII until he left in 2003. Originally the development focused on the gameplay with a simple story to appeal to Disney's target age range. After Kingdom Hearts executive producer Hironobu Sakaguchi told Nomura the game would be a failure if it Kingdom Hearts Costumes did not aim for the same level as the Final Fantasy series, he began to develop the story further.[107] In June 2013, Nomura stated the name of the game came from him thinking about Disney Theme Parks, especially Animal Kingdom. However, Nomura could not get the IP with just "Kingdom", so the development team began to think about "heart" as a core part of the story, so they decided to combine the two to form "Kingdom Hearts".[108][109]

Nomura placed a secret trailer in Kingdom Hearts in hopes that fans would want a sequel. He was unsure if fans would want a sequel and felt that if they did not, then it would be best to leave certain events in the first game unexplained.[110] After Kingdom Hearts Final Mix was completed, development for Kingdom Hearts II began.[111] There were several obstacles to clear before development could begin on a sequel. One was the development team's desire to showcase Mickey Mouse more;[110] Mickey's Cosplay Costumes inclusion in the first game was restricted to a very small role.[107] Nomura had planned for the sequel to take place a year after the first and originally intended for the events of that year to be left unexplained. To bridge the gap between the two games, Kingdom Hearts: Chain of Memories was developed.[112] Nomura was hesitant about releasing a game on the Game Boy Advance because he felt the 3D graphics of the original game would not translate well into 2D. He changed his position after hearing that children wanted to play Kingdom Hearts on the handheld system.