NBC announced drastic changes to the show for its third season. They wanted to switch the show from a single camera format to a multi-camera sitcom, possibly because multi-camera shows typically have lower physical production costs than single-camera shows. Furthermore, it was set up to explain the changed structure of the show by having Applegate, Arnett and Rudolph all playing actors who star in a fictional show-within-the-show called "Up All Night." Amidst the changes, series creator Emily Spivey and star Christina Applegate left the show. Despite looking for a replacement for Applegate, the series was eventually canceled.
The show was canceled not because of ratings, but due to the fact that the leads of the show did not want to have the format of the show change from a single-camera show to a multi-camera sitcom style show with a live audience.