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Finding Nemo The Musical had new songs written by Tony Award-winning Avenue Q composer Robert Lopez and his wife, Kristen Anderson-Lopez, would "combine puppets, dancers, acrobats and animated backdrops" and open in late 2006. Tony Award-winning director Peter Brosius signed on to direct the show, with Michael Curry, who designed puppets for Disney's successful stage version of The Lion King, serving as leading puppet and production designer.

Anderson-Lopez said that the couple agreed to write the adaptation of "one of their favorite movies of all time" after considering "The idea of people coming in [to see the musical] at 4, 5 or 6 and saying, 'I want to do that'....So we want to take it as seriously as we would a Broadway show."To condense the feature-length film to thirty minutes, she said she and Lopez focused on a single theme from the movie, the idea that "The world's dangerous and beautiful." The forty-minute show (which is performed five times daily) opened on January 2, 2007. Several musical numbers took direct inspiration from lines in the film, including "(In The) Big Blue World", "Fish Are Friends, Not Food", "Just Keep Swimming", and "Go With the Flow". In January 2007, a New York studio recording of the show was released on iTunes, with Lopez and Anderson-Lopez providing the voices for Marlin and Dory, respectively. Avenue Q star Stephanie D'Abruzzo also appeared on the recording, as Sheldon/Deb.

Nemo was the first non-musical animated film to which Disney added songs in order to produce a stage musical. In 2009, Finding Nemo – The Musical was honored with a Thea award for Best Live Show from the Themed Entertainment Association.