It is based on the Dinotopia book series by James Gurney, that depicts a fictional utopia in which sapient dinosaurs and humans coexist.

The main characters of the story are two American teenage boys from contemporary times (unlike the 19th century castaways in the books—the film thus loses some of the classicism of the original books).

The story in the film contains references to many of the characters in the book series, with some of their descendants occupying key roles in the plot.

Looking for help, Karl and David meet a man named Cyrus Crabb who informs them that they are in Dinotopia, a hidden civilization where human beings and dinosaurs co-exist peacefully.

Marion, David, Karl and the Brach bus conductor investigate the forest nearby and find Tyrannosaurus footprints.

In fact, some of the dinosaurs, notably a neurotic but friendly Stenonychosaurus named Zipeau, possess human intelligence and speak perfect English.

As Karl and David prepare to take their places in their new surroundings, both boys develop a strong bond with young Marion, who is on the verge of becoming a "matriarch" of the Dinotopian society.

Plans for a film based on Dinotopia were previously rejected due to the expense of creating a world populated by both humans and dinosaurs.

Many of the sets were only partially built, the rest being done digitally, to create the enormous buildings used by both dinosaurs and humans in the film.

Even so, the actual set for Waterfall City, Dinotopia's capital, took up five-and-a-half acres of the back lot of England's Pinewood Studios.