Computer game developer Bungie Studios conceived Halo: Combat Evolved as a real-time strategy game in which players would tactically control units and vehicles in a three-dimensional environment. Microsoft acquired Bungie in 2000, and the game became a first-person shooter and "killer app" for the Xbox console. Bungie produced two best-selling sequels, Halo 2 in 2004 and Halo 3 in 2007, before separating from Microsoft and becoming an independent company once more. Although Bungie is free to produce new intellectual property, the rights to Halo remain with Microsoft. Shane Kim, the head of Microsoft Game Studios, said during the split announcement that "our intent is to continue investing in [Halo] and growing it."

In 2004, the Microsoft-owned Ensemble Studios—developers of the Age of Empires strategy series—began work on the game that would become Halo Wars.[33] The studio confirmed in April 2006 that it was working on a console-based RTS. CEO Tony Goodman said, "We're giving RTS games on the console a shot. We actually spent a whole year just trying to reconstruct how the controls would work on an RTS game." Without revealing the title, Goodman described the game as being shorter and more visceral than their previous projects.

Halo Wars was originally not a Halo series title. Ensemble spent 12 to 18 months working on the control scheme, using the Age of Mythology engine. The development team hacked an Age of Mythology expansion, The Titans, and used it as a prototype for control experiments. Ensemble found that managing Age of Mythology's resources, units, and buildings was too difficult with the console's controller. "The answer [to making a PC-style strategy game for a console] is actually hidden in the question," Jason Pace, Microsoft Game Studio's lead producer, told The New Zealand Herald. "It's something we believe has held strategy games back from succeeding on the console: you can't effectively bring a PC-style strategy game to the console because the fundamental game mechanic is tied to the mouse and keyboard input devices. It's not a question of just changing the control scheme to be gamepad friendly—you need to adapt the underlying strategy mechanic to make sense with the new input device." Senior designer Justin Rouse said that the team kept the controls from the research they had conducted, but scrapped the rest in favor of "build[ing] from the floor up what we need[ed]: the basics, the core of a strategy game." With the goal of making "the first great strategy game on the console", Ensemble streamlined gameplay mechanics; the game's single resource is produced at each base site, which allows players to quickly cycle through their bases instead of micromanaging multiple resources at many locations.[2]

Once the developers were satisfied with the controls, they presented their project to Microsoft, who suggested that it be turned into a Halo game. Bungie was reportedly not happy about this development. Ensemble's Founder, Tony Goodman, stated in a 2012 interview that Bungie saw the move as "the whoring out of our franchise"

Although Ensemble had to re-create all of Bungie's assets from scratch, Bungie had produced a large amount of reference material for the Halo film adaptation that the Halo Wars team used for inspiration. Another reference point was art from the Halo first-person shooters; however, as the art was from a forward perspective and Halo Wars takes place from a bird's-eye view, the team exaggerated shapes to make the units recognizable. Lead designer Graeme Devine noted that the Warthog Jeep is "actually jumping three times as high as it does in Halo, and it goes four times faster than it does in Halo, and all these things—but it looks the same. Very different, between look and accuracy."To ensure artistic continuity between Halo Wars and previous games in the series, Ensemble created a set of guidelines for their artists to follow; for example, the Covenant were to retain their curvy, organic look, while the Forerunner and UNSC were to keep the same geometry angles. UNSC structures and units were given a green tint, with gold specular highlights. The Covenant were textured with a repeating honeycomb pattern, with small blue lights against a purple base color.

Devine described the challenge of developing Halo Wars as "getting Halo fans to play a realtime strategy game, and getting realtime strategy fans to play a Halo game.""Fans of the [first-person shooter] series have very strong expectations for how a Halo games looks, feels and plays. Halo is all about heroic action to save humanity, mega-battles across the galaxy, visceral, highly-tuned combat and heart-pounding tension," Pace said. These themes were considered fundamental to the Halo experience, and so Ensemble tried to replicate them for Halo Wars. Early in play tests, the developers watched devoted Halo fans play the game; their feedback led to the development of special abilities, which, according to Devine, enhanced the Halo feel. Ensemble initially considered making the Flood a playable race, but this idea did not progress beyond the concept stage. According to Devine, this was largely because the Flood would have needed to be similar to StarCraft's Zerg, in order to maintain balance with the UNSC and Covenant. This did not match the Flood's role as "the single scariest thing in the galaxy".

Because of the Master Chief's large role in previous games, significant effort was expended on the Spartan units. Lead designer Dave Pottinger said the design team "started out just accepting and embracing the fact that the Spartans have to be the coolest unit in the game. If they're not, it's not going to meet the Halo fans' expectations."To position the Spartans as "kingmakers" in gameplay, the team gave them what it considered to be the "coolest" unit ability: hijacking enemy vehicles. The developers hoped players would become attached to individual Spartans in the campaign and gave each one an individual name; skirmish units were left nameless. The character design of the Spartans was meant to emphasize their relative inexperience and the setting of the game, which takes place decades before the events of the main trilogy. Devine commented on the Spartans' look: