A method of producing an indwelling needle assembly formed by assembling together an inner needle having a sharp point only at its tip, an inner needle hub fixed to the base end of the inner needle, a hollow outer needle for allowing the inner needle to be inserted through the hollow outer needle, an outer needle hub fixed to the base end of the outer needle, and a seal member made from an elastic material, provided on the outer needle hub, allowing the inner needle to be inserted through the seal member, and performing a sealing function when the inner needle is withdrawn. The method has an insertion step for inserting the inner needle, with the side opposite to its needle point first, into the seal member to set the inner needle to an inserted state, a lubricant application step for applying, in the inserted state, lubricant to the outer peripheral surface of at least that portion of the inner needle which protrudes from the seal member, and a reciprocation step for axially reciprocating at least one time the inner needle relative to the seal member to cause the lubricant to penetrate the inside of the seal member.