According to director Fritz Lang, the inspiration for the film came from a trip he and producer Erich Pommer took to the U.S. in 1924. As they sailed into New York Harbor, Lang was struck by the sight of the city, with its towering skyscrapers lit by neon. That image led him to envision Metropolis, the city of the future. The story is not entirely true, however. Newspaper articles and internal memos from UFA indicate that the screenplay was well underway months before Lang and Pommer traveled to New York.

Lang's wife, Thea von Harbou, worked out his ideas for the film in a novel intended to serve as the basis for a film. She then worked with Lang to develop a screenplay. In that process, the book's references to occultism were cut to focus the story more on science.

From the start, Lang envisioned the film as the most expensive ever made in Europe. UFA executives did not expect a profit, but thought the mammoth production would open more doors for their films in the lucrative U.S. market.

For the showy role of the mad scientist, Rotwang, Lang cast Rudolf Klein-Rogge, an accomplished character actor who had starred in several of his earlier films, including Dr. Mabuse: The Gambler (1922), Siegfried (1924) and Kriemhild's Revenge (1924). Von Harbou was Klein-Rogge's ex-wife.

Alfred Abel, who played the industrialist Joh Fredersen, had also worked with Lang previously in Dr. Mabuse: The Gambler.

By contrast, the film's leading lady was a newcomer. Brigitte Helm was not really interested in acting and only tested for the role because her mother had sent her picture to Lang and von Harbou. Lang asked her to bring the girl to meet him on the set of Die Niebelungen (1924). When he asked her if she was interested in being an actress, Helm said, "Never in my life." (Brigitte Helm, quoted in Patrick McGilligan, Fritz Lang: The Nature of the Beast.) Lang laughed until tears streamed from his eyes. He gave her a brief screen test, and then waited a year before asking her back for another. This time, she acted a scene from Kriemhild's Revenge (1924) so well Lang and Pommer thought her better than the actress in the film, and they cast her in Metropolis. Her first screen role would make her a star at the age of 19.

By Frank Miller