Ernst Lubitsch died suddenly of his third heart attack after completing just eight days of filming on this movie. Otto Preminger was the rather unusual choice of replacement for him, getting the job simply because he was a contract director with the studio and not making a film at the time. (The project he had been preparing had stalled because of the blacklisting - and subsequent imprisonment - of his screenwriter, Ring Lardner Jr.). Preminger had no interest in "That Lady In Ermine" and predicted that it would be neither a critical success nor a popular one, but he agreed to complete it on condition that he received no credit at all for his contribution. Untypically, he took no part in the editing of the film or any other aspect of post-production work, leaving it all to studio chief Darryl F. Zanuck. As he had forecast, it was a critically-disliked flop.
Irene Dunne was considered for the title role before Betty Grable was cast.
At nearly 2 and a half million dollars, the most expensive film in the career of Ernst Lubitsch.