Actor Kirk Douglas, who had originated the role of McMurphy in the 1963–64 Broadway stage version of the Ken Kesey novel, had purchased the film rights to the story and tried for a decade to bring it to the big screen, but was unable to find a studio willing to make it with him. Eventually, he gave the rights to his son Michael Douglas, who succeeded in getting the film produced. But the elder Douglas, by then nearly 60, was considered too old for the McMurphy role, which ultimately went to 38-year old Jack Nicholson.

Douglas brought in Saul Zaentz as co-producer. The film's first screenwriter, Lawrence Hauben, introduced Douglas to the work of Miloš Forman, whose 1967 Czechoslovak film "The Firemen's Ball" had the sort of qualities they were looking for. Forman flew to California and went through the script page by page and outlined what he would do, in contrast with other directors who had been approached who were less than forthcoming. Saul Zaentz, a voracious reader, felt an affinity with Kesey, and so after Hauben's first attempt he asked Kesey to write the screenplay, and promised him a piece of the action, but it didn’t work out and ended in a financial dispute.

Hal Ashby, who had been an early consideration for director, suggested Jack Nicholson for the role of McMurphy. Production was delayed for about six months because of Nicholson’s schedule. However, Douglas later felt that this ended up as a blessing as it gave more time to get the ensemble right.

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