Promotional art for Circle 7's Toy Story 3, displaying the storyline of the Buzz Lightyears being recalled.

Jim Herzfeld wrote a script for Circle 7's version of the film. It focused on the other toys shipping a malfunctioning Buzz to Taiwan, believing that he will be fixed there. While searching on the Internet, however, they find out that the malfunctions are happening to many toys around the world and the company has issued a massive recall. Fearing Buzz's destruction, a group of Andy's toys (Woody, Rex, Slinky, Mr. Potato Head, Hamm, Jessie, and Bullseye) venture to rescue Buzz. At the same time Buzz meets other toys from around the world that were once loved but have now been recalled.

In January 2006, Disney bought Pixar in a deal that put Pixar chiefs Edwin Catmull and John Lasseter in charge of all Disney Animation. Shortly thereafter, Circle 7 Animation was shut down and its version of Toy Story 3 was shelved. The following month, Disney CEO Robert Iger confirmed that Disney was in the process of transferring the production to Pixar. John Lasseter, Andrew Stanton, Pete Docter, and Lee Unkrich visited the house where they first pitched Toy Story and came up with the story for the film over a weekend. Stanton then wrote a treatment. On February 8, 2007, Catmull announced Toy Story 2's co-director, Lee Unkrich, as the sole director of the film instead of John Lasseter, and Michael Arndt as screenwriter. The release date was moved to 2010.