Other authors such as August Derleth and Clark Ashton Smith also cited it in their works; Lovecraft approved, believing such common allusions built up "a background of evil verisimilitude." Many readers have believed it to be a real work, with booksellers and librarians receiving many requests for it; pranksters have listed it in rare book catalogues, and a student smuggled a card for it into the Yale University Library's card catalog.

Capitalizing on the notoriety of the fictional volume, real-life publishers have printed many books entitled Necronomicon since Lovecraft's death.

How Lovecraft conceived the name "Necronomicon" is not clear — Lovecraft said that the title came to him in a dream. Although some have suggested that Lovecraft was influenced primarily by Robert W. Chambers' collection of short stories The King in Yellow, which centers on a mysterious and disturbing play in book form, Lovecraft is not believed to have read that work until 1927.

Donald R. Burleson has argued that the idea for the book was derived from Nathaniel Hawthorne, though Lovecraft himself noted that "mouldy hidden manuscripts" were one of the stock features of Gothic literature.

Lovecraft wrote that the title, as translated from the Greek language, meant "an image of the law of the dead": nekros - νεκρός ("dead"), nomos - νόμος ("law"), eikon - εικών ("image"). Robert M. Price notes that the title has been variously translated by others as "Book of the names of the dead", "Book of the laws of the dead", "Book of dead names" and "Knower of the laws of the dead".[citation needed] S. T. Joshi states that Lovecraft's own etymology is "almost entirely unsound. The last portion of it is particularly erroneous, since -ikon is nothing more than a neuter adjectival suffix and has nothing to do with eikõn (image)." Joshi translates the title as "Book considering (or classifying) the dead."

Lovecraft was often asked about the veracity of the Necronomicon, and always answered that it was completely his invention. In a letter to Willis Conover, Lovecraft elaborated upon his typical answer:

Now about the “terrible and forbidden books” — I am forced to say that most of them are purely imaginary. There never was any Abdul Alhazred or Necronomicon, for I invented these names myself. Robert Bloch devised the idea of Ludvig Prinn and his De Vermis Mysteriis, while the Book of Eibon is an invention of Clark Ashton Smith's. Robert E. Howard is responsible for Friedrich von Junzt and his Unaussprechlichen Kulten.... As for seriously-written books on dark, occult, and supernatural themes — in all truth they don’t amount to much. That is why it’s more fun to invent mythical works like the Necronomicon and Book of Eibon.

Reinforcing the book's fictionalization, the name of the book's supposed author, Abdul Alhazred, is not even a grammatically correct Arabic name. The name "Abdul" simply means "the worshiper/slave of...". Standing alone, it would make no sense, as Alhazred is not a last name in the Western sense, but a reference to a person's place of birth.

In 1927, Lovecraft wrote a brief pseudo-history of the Necronomicon that was published in 1938, after his death, as A History of The Necronomicon. This work allowed subsequent fiction writers to remain consistent with Lovecraft's treatment of the Necronomicon. According to this account, the book was originally called Al Azif, an Arabic word that Lovecraft defined as "that nocturnal sound (made by insects) supposed to be the howling of demons" (one Arabic/English dictionary translates `Azīf as "whistling (of the wind); weird sound or noise".)

In the History, Alhazred is said to have been a "half-crazed Arab" who worshipped the Lovecraftian entities Yog-Sothoth and Cthulhu. He is described as being from Sanaa in Yemen, and as visiting the ruins of Babylon, the "subterranean secrets" of Memphis and the Empty Quarter of Arabia (where he discovered the "nameless city" below Irem). In his last years, he lived in Damascus, where he wrote Al Azif before his sudden and mysterious death in 738.