The idea for They Live came from a short story called “Eight O’Clock in the Morning” by Ray Nelson, originally published in The Magazine of Fantasy and Science Fiction in November 1963, involving an alien invasion in the tradition of Invasion of the Body Snatchers, which Nelson, along with artist Bill Wray, adapted into a story called “Nada”, published in the Alien Encounters comic book anthology (cover date: April 1986). John Carpenter describes Nelson’s story as “…a D.O.A.-type of story, in which a man is put in a trance by a stage hypnotist. When he awakens, he realizes that the entire human race has been hypnotized, and that alien creatures are controlling humanity. He has only until eight o’clock in the morning to solve the problem.” Carpenter acquired the film rights to both the comic book and short story and wrote the screenplay, using Nelson’s story as a basis for the film’s structure.
The more political elements of the film are derived from Carpenter’s growing distaste with the ever-increasing commercialization of 1980s popular culture and politics, particularly the influence of Reaganomics, the economic policies promoted by U.S. President Ronald Reagan. He remarked, “I began watching TV again. I quickly realized that everything we see is designed to sell us something… It’s all about wanting us to buy something. The only thing they want to do is take our money.” To this end, Carpenter thought of sunglasses as being the tool to seeing the truth, which “is seen in black and white. It’s as if the aliens have colorized us. That means, of course, that Ted Turner is really a monster from outer space.” (Turner had received some bad press in the 1980s for colorizing classic black-and-white movies.) The director commented on the alien threat in an interview: “They want to own all our businesses. A Universal executive asked me, ‘Where’s the threat in that? We all sell out every day.’ I ended up using that line in the film.” The aliens were deliberately made to look like ghouls, according to Carpenter, who said, “The creatures are corrupting us, so they, themselves, are corruptions of human beings.”