Writer and director Martin McDonagh was inspired to write the movie after seeing billboards about an unsolved crime while travelling "somewhere down in the Georgia, Florida, Alabama corner.".
Frances McDormand was hesitant to take the role of Mildred when offered to her, but was eventually convinced by her husband, Joel Coen. She said, "Because at the time he gave it to me I was fifty-eight. I was concerned that women from this socioeconomic strata did not wait until thirty-eight to have their first child. So we went back and forth and we debated that for quite a while, and then finally my husband said, 'Just shut up and do it.'"
Woody Harrelson would often use his breaks from shooting to sign autographs and take pictures with locals who had come to watch the filming. During an extended break one day, he played an impromptu guitar performance at the music store next to the police station set.
The basis of this story is from actual events in Vidor, Texas just outside of Beaumont, Texas. The police ignored both the facts and the parents of a poor girl who was murdered in 1991, by an alleged hometown hero from an old money family. As the police have done nothing, the billboards are still up on Interstate 10.