Cameron announced that after completing Titanic, he would film Avatar, which would make use of synthetic, or computer-generated, actors. The project would cost $100 million and involve at least six actors in leading roles "who appear to be real but do not exist in the physical world".
Visual effects house Digital Domain, with whom Cameron has a partnership, joined the project, which was supposed to begin production in mid-1997 for a 1999 release.
However, Cameron felt that the technology had not caught up with the story and vision that he intended to tell. He decided to concentrate on making documentaries and refining the technology for the next few years
From January to April 2006, Cameron worked on the script and developed a culture for the film's aliens, the Na'vi. Their language was created by Dr. Paul Frommer, a linguist at USC.
From 2005 to 2007, Cameron worked with a handful of designers, including famed fantasy illustrator Wayne Barlowe and renowned concept artist Jordu Schell, to shape the design of the Na'vi with paintings and physical sculptures when Cameron felt that 3-D brush renderings were not capturing his vision, often working together in the kitchen of Cameron's Malibu home.
In July 2006, Cameron announced that he would film Avatar for a mid-2008 release and planned to begin principal photography with an established cast by February 2007
Principal photography for Avatar began in April 2007 in Los Angeles and Wellington. Cameron described the film as a hybrid with a full live-action shoot in combination with computer-generated characters and live environments. "Ideally at the end of the day the audience has no idea which they're looking at," Cameron said.
The director indicated that he had already worked four months on nonprincipal scenes for the film. The live action was shot with a modified version of the proprietary digital 3-D Fusion Camera System, developed by Cameron and Vince Pace. In January 2007, Fox had announced that 3-D filming for Avatar would be done at 24 frames per second despite Cameron's strong opinion that a 3D film requires higher frame rate to make strobing less noticeable. According to Cameron, the film is composed of 60% computer-generated elements and 40% live action, as well as traditional miniatures.
Avatar premiered in London on December 10, 2009, and was released theatrically worldwide from December 16 to 18. The film was originally set for release on May 22, 2009, during filming but was pushed back to allow more post-production time (the last shots were delivered in November) and give more time for theaters worldwide to install 3D projectors. Cameron stated that the film's aspect ratio would be 1.78:1 for 3D screenings and that a 2.39:1 image would be extracted for 2D screenings
Internationally, Avatar opened on a total of 14,604 screens in 106 territories, of which 3,671 were showing the film in 3D (producing 56% of the first weekend gross). The film was simultaneously presented in IMAX 3D format, opening in 178 theaters in the United States on December 18. The international IMAX release included 58 theaters beginning on December 16, and 25 more theaters were to be added in the coming weeks.