The short film was directed by Itsuro Kawasaki, co-written by Junichi Fujisaku and Midori Goto, and was produced by Production I.G.

Set between the two seasons of the anime series Tsubasa by Bee Train, the film continues Syaoran's group's journey to find Sakura's "feathers" (memories) in different worlds.

In North America The Princess in the Birdcage Kingdom was licensed by Funimation Entertainment, who released it with A Midsummer Night's Dream and episodes of the Tsubasa anime.

Because of the ring the country remains trapped in darkness, and Syaoran's group asks Dimensional Witch Yuko Ichihara for help.

Princess Tomoyo gives Yūko her bell, sacrificing the relationship between the citizens and the birds in exchange for a key which frees the country from its darkness.

Kodansha (publisher of the Tsubasa and xxxHolic manga) conceived the idea of developing both films and contacted Production I.G, who chose Toru Kawaguchi and Tetsuya Nakatake as producers.

[1] Directed by Itsuro Kawasaki and written by Midori Goto and Junichi Fujisaku, its characters were designed by Yoko Kikuchi and its music composed by Yuki Kajiura.

Yuki Kajiura was asked to compose a score different from that of the TV series to convey the characters' state of mind, and Natakate was pleased with the result.

Reviewing the film with xxxHolic, IGN's N. S. Davidson found it appealing to Tsubasa series viewers despite its short length.

Davidson enjoyed the interaction between the films' storylines, allowing elements of Tsubasa to be explained in xxxHolic, and noted artistic similarities between them.

[20] odd Douglass, Jr. of DVD Talk agreed, saying that series fans would enjoy its story and pacing and overlook its length.

[22] Blu-ray's Dustin Somner compared the film to the anime series, calling it "a bit stronger than the majority of the television episodes" due to its quick pace.

[24] Also criticizing the film's length, Chris Beveridge of Mania Entertainment wrote that its extras compensated and found The Princess in the Birdcage Kingdom's animation appealing as a contrast with that of xxxHolic.