The character of Davis Newman (Cliff Gorman) was based on Dustin Hoffman who had played the title role in Bob Fosse's earlier film Lenny (1974). Gorman had initially portrayed Lenny Bruce in the original Broadway run of the play from which the film was adapted, but was passed over in favor of Hoffman for the film version.
Many of the characters in the film are based on real-life characters from the New York theater world. Aside from Roy Scheider, Leland Palmer's character was based on his wife/frequent star Gwen Verdon. John Lithgow's character was also based somewhat on the New York theater director Michael Bennett, director of "Dreamgirls" with whom Bob Fosse had a longstanding rivalry. The character of producer Jonesy Hecht was based upon his fellow longtime rival Harold Prince. Ann Reinking was more or less playing herself. The character of songwriter "Paul Dann" is a swipe at Stephen Schwartz, with whom he had unhappily worked on "Pippin". Jules Fisher, the lighting designer on many of Fosse's shows, and later the producer of his show "Dancin'", makes an appearance as a lighting designer in the scene with Lithgow. The film is based on Fosse's real-life heart attack whilst both editing his film Lenny (1974) and simultaneously directing the original 1975 Broadway production of "Chicago".
Richard Dreyfuss was originally cast in the role of Joe Gideon but left the production during the rehearsal stage, citing a lack of confidence in the production. He later admitted that he made a mistake in passing up the chance to work with Bob Fosse'.
According to Shirley MacLaine in her autobiography "My Lucky Stars", the idea for this film was hatched when Bob Fosse was hospitalized for a heart attack. MacLaine claims she was the one who gave Fosse the idea to do "a musical about his death" though she said Fosse seemed to not remember this later. However, Fosse did offer her the role of Audrey Paris, she wrote.
Bob Fosse's 16-year-old daughter, Nicole Fosse, appears briefly as a dancer, doing stretches in front of a vending machine, who is asked, "Can't you do that somewhere else?" while Joe Gideon is introducing his new idea for the Air-otica number.
The studio did not originally want Roy Scheider for the role of Joe Gideon. They wanted Warren Beatty or a more critically acclaimed actor for the role. Bob Fosse stuck to his choice and fought for Scheider, eventually securing him in the lead.
One of the first lines, "To be on the wire is life; the rest is waiting", is spoken voice-over as we see a man falling from a high wire into a net (and the speaker then admits he did not make it up). The quote is generally attributed to Karl Wallenda, who had died the year before the film came out, when he fell from a high wire without a net.
The relationship between the characters Victoria (Deborah Geffner) and Joe Gideon (Roy Scheider) was based on the relationship during rehearsals between director Bob Fosse and dancer Jennifer Nairn-Smith whilst working on the stage musical "Pippin". Nairn-Smith actually appears in this movie playing a Principal Dancer.
The budget for this film blew-out from US $6.5 million to US $10 million. Director Bob Fosse went over-budget before filming the famous "Bye, Bye Life" finale. The Columbia studio refused to give him any more money. At an impasse, Columbia execs privately showcased much of what was in the can of the film for the president of Twentieth Century-Fox. Impressed, the president agreed that Fox would finance the remainder of the shoot; he also asked for and received distribution and cable rights. Profits from the picture were split according to the contract between the two studios, although Fox received top billing over Columbia in the credits.
According to Roy Scheider, for the opening "cattle call" scene in which Joe Gideon picks out dancers for his show, Bob Fosse gave Scheider an earpiece and spoke to him during filming to help the actor appear as if he knew what he was doing.
Actress Jessica Lange has appeared in two films that have been nominated for Best Picture at the Academy Awards: Tootsie (1982) and All That Jazz (1979). Both films are about performance and neither movies won the Best Picture Oscar.
Joe Gideon's catchphrase "it's showtime, folks!" was referenced in season 1 episode 2 of "Better Call Saul" when Saul Goodman points to the mirror a la Gideon and says "it's showtime folks!". When it is overheard he says "it's from a movie!"