Originally intended as a small film after the enormous cost, pressures, and production problems of Apocalypse Now (1979), this film's budget ballooned from $2 million to over $25 million. The extraordinary costs led to director Francis Ford Coppola declaring bankruptcy. Coppola has stated that the films he made were done to pay off the debts incurred producing this film.

Rather than shooting on location, director Francis Ford Coppola insisted on building sets. A replica of Las Vegas' McCarran Airport, complete with a jetway and jet airliner (built from the nose section of a crashed plane), was built and used for the penultimate scene. The sets for the film consumed the entire sound stage space at Coppola's recently-acquired American Zoetrope studio. Because of the maze of wiring and flammable scrims, backdrops, and other materials, production designer Dean Tavoularis half-jokingly referred to the Vegas Strip set as a "firetrap", saying it caused him to have "nightmares about fires" during production.

Francis Ford Coppola directed most of the film from The Silver Fish, a mobile HQ fully equipped with a kitchenette, espresso machine, and onboard Jacuzzi. Coppola would issue his directions via loudspeaker.

In order to make the signs for the miniature Las Vegas scenes work, neon artists Larry Albright and Bill Concannon needed to develop a process for making neon signs where the tubing was 2mm in diameter. (By comparison, most neon signage is between 10mm and 18mm, where most of the tubing on the Las Vegas strip is 15mm.) Custom glassblowing burners, electrodes, and other hardware needed to be fabricated from scratch. Amazingly enough, many of the pieces produced still work today.

Debut film score composed by singer, songwriter, and composer Tom Waits.

Carmine Coppola: The director's father appears with his wife Italia as a couple in an elevator.