Starting in the late aughts, allegedly accurate films of supernatural events such as the "Haunting" and "Conjuring" franchises began popping up like weeds. With the film’s found-footage aesthetic and a pair of unknown actors in the lead roles, many believed “Paranormal Activity” was a stark recounting of actual events.

However, the film is not based on a true story. One surefire way to recognize that fact is that the movie has two alternative endings, while most biopics already have their third act locked in thanks to time's linear nature.

Writer and director Oren Peli said that he drew inspiration for the film when he moved to a new house and started hearing noises at night. It eventually led him to the idea of someone setting up a camera to prove or disprove that their house was haunted.