The film was originally produced in 1988 under the title "Snow White and the Realm of Doom," but Disney feared consumers would mistake it for a direct sequel to Snow White and the Seven Dwarfs (1937) and filed a lawsuit, ultimately prompting a title change and several drastic alterations to the film's content.

In 1990, Filmation licensed the movie to First National Film Corporation for a June theatrical release. A dispute between the two companies, however, would delay its public exhibition for another three years.

Three years before opening, the film was test-marketed in the Long Island market as "Snow White: Happily Ever After". The test was unsuccessful and the film remained on the shelf before being reissued under its current title.

The video went on moratorium 25 October 1996.

In early 1985, Filmation announced plans to produce a series of 13 animated films under the umbrella title of "Filmation's New Classics Collection." They were to be feature-length stories to be distributed in theaters, on video and then sold for television broadcast and possible spin-off series. The titles were: "The New Adventures of Pinnocchio", "Snow White and the Seven Dwarfelles", "The Challenge of Cinderella", "Time Machine II: The Man Who Saved the Future", "Bambi: Prince of the Forest". "20 Million Leagues Across the Universe", "Frankenstein Lives Again!", "The Further Adventures of Gulliver", "The son of Sleeping Beauty", "L. Frank Baum's The Life and Adventures of Santa Claus", "The Continuing Adventures of the Jungle Book", "New Tales of Arabian Nights" and "Alice Returns to Wonderland". The Walt Disney company sued Filmation before production had even started for proposing to make sequels to their classic films and in the end, only the first two titles saw production, as Pinocchio and the Emperor of the Night (1987) and Happily Ever After.

The project when through various title changes, including "Snow White and the Seven Dwarfelles", "Snow White - The Adventure Continues", "Snow White in the Land of Doom" and "Snow White: Happily Ever After".

This is the last production made by Filmation which was released years after they shut down due to legal disputes. They had suddenly closed their doors permanently on February 3, 1989 right as it was in the process of being sold to L'Oreal leaving the cosmetic company with only the rights to previous works.