During filming of the live-action Mr. Hankey commercial, the baby originally held the Mr. Hankey stool (actually chocolate) and took a bite out of it. Comedy Central officials would not allow the scene in the episode and it was changed to portray the idea that the baby had already eaten the stool off-camera, which Trey Parker said he felt was actually funnier.
This is the first episode in which Kenny was not killed. Trey Parker and Matt Stone deliberately included several scenes that looked like they might lead to Kenny's death, but they decided because it was Christmas that they would not kill him.
This was considered the first musical episode of the series, and included such songs as "Mr. Hankey, the Christmas Poo", "A Lonely Jew on Christmas" and "Kyle's Mom is a Big Fat Bitch". Trey Parker and Matt Stone were initially concerned about making a musical because, Parker said, "The general rule was people hated musicals".
The episode was the first time Mr. Garrison was portrayed as an anti-semite and racist, particularly when he asks Mayor McDaniels if she can get rid of all the Mexicans in South Park. Trey Parker said this decision was made because, "Garrison at that point had already shown himself to be the most messed up person in the entire town, and there's obviously so much wrong with him mentally. A person that disturbed being a racist is funny to us."
The unsuccessful efforts by the South Park Elementary School in the episode to include people of non-Christian denomination were inspired by similarly failed attempts Trey Parker and Matt Stone witnessed growing up. Parker cited as an example a chorus concert in which the single Jewish student was asked to sing her own Hanukkah song while everybody else sang Christmas songs; although the idea was to make the student feel special, Parker said it only made her feel more lonely and isolated.