Desert Bus was originally a mini-game of the unreleased title Penn and Teller's Smoke and Mirrors for the SEGA CD, PC and 3DO by Imagineering. Imagineering, a division of the game's publisher Absolute Entertainment, went out of business before completion and that way it was never released. The game starred the comedy-magician duo Penn & Teller. It was one of the six mini-games included in the game. Penn Jillette later explained in his radio show that the game, dubbed a Verisimulator, was created in response to Janet Reno's comments in support of the moral panic about violent video games at the time.
The game resurfaced in September 2005 when Frank Cifaldi, a freelance American journalist and founder of the Lost Levels website, dedicated to the preservation of rare and obscure video games, received the game in the mail from one of the people who was able to review the game prior to the release. The game was posted online and this led to the rediscovery of Desert Bus.
The game was popularized through the Canadian sketch group LoadingReadyRun who launched the charity event Desert Bus for Hope in November 2007 when they took turns playing the game continuously with four players, with more hours added as more donations were made. The game was eventually remade from scratch for a variety of platforms.