Rockstar Games first announced the game on July 19, 2007. The Xbox 360 version also uses a new proprietary game engine by developers Mad Doc Software. In addition, single system 2-player competitive multiplayer minigames have also been added, along with Achievements for the Xbox 360 version and Wii Remote motion and pointer controls for the Wii version.

The game features improved graphics and exclusive content which was unavailable in the PlayStation 2 version, including eight new missions, additional characters, four new school classes ( Biology, Music, Math, and Geography) and new unlockable items and clothing. The game was released for the Xbox 360 and Nintendo Wii video game consoles and for Microsoft on March 4, 2008. The game adds several new features, and fixes many bugs found in the PS2 version.

Bully: Scholarship Edition is an updated and graphically enhanced version of Bully, released on Xbox 360, Nintendo Wii, and Windows in 2008.