Simon Pegg and Nick Frost came up with the concept for Paul while waiting out a rainstorm on the set of Shaun of the Dead (2004). They handed producer Nira Park a sketch drawing of Paul wearing an FBI t-shirt, flipping off the viewer, with a caption that read "In the U.S., everybody is an alien." The actual drawing can be seen during the closing credits.
Simon Pegg and Nick Frost made the film to demonstrate their love for Steven Spielberg's science fiction classics Close Encounters of the Third Kind (1977) and E.T. the Extra-Terrestrial (1982). When Spielberg got wind of the project, he happily suggested that he make a cameo appearance of some sort, in this case a voice on a speakerphone.
While researching the film, Simon Pegg and Nick Frost drove an RV along the route Clive and Graeme take in the script. During the trip, they stopped at the Little A'le'inn, where they encountered a chatty waitress and some belligerent locals. The encounter inspired them to include it in the script.
During the sequence in the comic shop, an issue of "The Boys" (a genuine series) can be seen on one of the racks. One of this comic's main characters (Hughie Campbell) was intentionally drawn to look like Simon Pegg. Pegg wrote the introduction for the first collected edition of "The Boys" and would later appear in the TV adaptation of the graphic novels on Amazon Prime Video.
For much of the filming, Seth Rogen was off filming The Green Hornet (2011), and so was unable to completely inhabit Paul's motion, and interact with the other actors. Joe Lo Truglio, who also plays O'Reilly in the film, stood in and finished what Rogen didn't complete. He studied Rogen extensively, in order to impersonate his voice, performed on his knees to capture Paul's physical presence, and even improvised in character as Paul. When filming wrapped, Rogen came in and provided the character's voice.