The "Alice" series had proved to be a winner for Disney, so much so that Margaret Winkler decided to renew their contract. This time around she asked for eighteen films instead of twelve. The only consideration she asked was that the brothers find some way of cutting costs. Walt was getting much more interested in the animation aspect of the films instead of the live-action sequences, so he didn't want to short change his animators. The only place left to cut was actors.

When Virginia Davis had originally been hired, she had been promised a regular monthly salary. This time around, Disney wanted to cut her pay to a daily rate based on the days that she actually worked. Since the animated sequences were beginning to take center stage, this would have meant that the live action sequences could have been filmed for all eighteen shorts within the space of half a month. The Davises decided this was not the deal for them and pulled out of the series. Virginia Davis, though, found work as a child star elsewhere, and eventually returned to Disney for a short stint in the Ink and Paint department.

Disney tried an established child actress named Dawn O'Day. (Her real name was Dawn Paris; she would later change her name to Anne Shirley.) However the stipend that Disney could pay her could not suffice for what was at best a single income family; that income being hers. Disney then recalled a little girl who had been given a trial run in "Alice Solves the Puzzle", Margie Gay, who brought a whole new look to Alice. She would remain the star of the series though most of the rest of the run.