The genesis of the story came to Don Coscarelli in a dream. One night, being in his late teens, he dreamed of fleeing down endlessly long marble corridors, pursued by a chrome sphere intent on penetrating his skull with a wicked needle. There was also a quite futuristic "sphere dispenser" out of which the orbs would emerge and begin chase.
The film was originally rated X by the MPAA because of the famous silver sphere sequence, and because of the man urinating on the floor after falling down dead. Los Angeles Times film critic Charles Champlin made a phone call in a favor to a friend on the board. Thanks to him, Phantasm was downgraded from the original dreaded X-rating to a more acceptable R. Champlin's positive review was quoted on the film's promotional posters.
This film's original running time was more than three hours, but writer/ director Don Coscarelli decided that that was far too long for it to hold people's attention and made numerous cuts to the film. Some of the unused footage was located in the late 1990s and became the framework for Phantasm IV: Oblivion (1998). The rest of the footage is believed to be lost.
The "ball" scenes were simple special effects. The sphere was being guided around a corner by a fishing line. The sphere was thrown from behind the camera by a baseball pitcher and then the shot was printed in reverse. The ball attaching itself to the man's head was filmed by sticking it on his head, then pulling it off, and printing the shot in reverse.
The spheres were designed by craftsman Willard Green who charged the production a little over $1,100 for his services. Sadly, he died just after production completed at the end of 1977, and never saw his work on the big screen.
The coffin that Mike sees the Tall Man lift by himself and shove back into the hearse was made out of balsa wood, empty, and had a rope on the side facing away from the camera to make it easier to handle. The rope can be briefly seen as the Tall Man lifts up the coffin.
Don Coscarelli rented all of the filming equipment used to make this movie, always on Fridays so he could use it all weekend and return it on Mondays, all the while only actually having to pay one day's rental on the equipment.
The 1971 Plymouth Barracuda was chosen because Don Coscarelli remembered a guy in high school had one, and was a little envious of him. A Barracuda was made to look like the Hemi 'Cuda. Though in one scene you can see the designation of 440-6 on the hood. Indicating the car had a 440, with a "six pack" (3 two-barrel carburetors).Bill Thornbury then took the car to a friend of his and had it custom striped so it felt like it was really his car. The true purpose of the car was so the brothers Mike and Jody could have a means of bonding. In fact, A. Michael Baldwin learned to drive in that car, he was only 14 at the time! After the movie was finished, the car was sold, and to this day nobody is sure what really happened to it. As a result the black Hemi 'Cuda became just as much of a hallmark to the series as the chrome spheres.
Don Coscarelli got the idea of The Tall Man's living severed finger while drinking from a styrofoam cup. He punched his finger through the bottom and started moving it. He loved the visual effect of it and decided to include it in the story.
At the scene near the end when Reggie comes out of the funeral home, the production installed a wind machine with a huge fan blowing to create the effect of a very strong wind. As a joke, A. Michael Baldwin started throwing stones in front of the fan, that went to hit Reggie Bannister and Kathy Lester several times.
Co-Producer Paul Pepperman approached Angus Scrimm at a sneak preview of Kenny & Company (1976) and told him that Don Coscarelli had written a role for him in his next production. When informed that he would be playing an alien, Scrimm became very excited and immediately asked to know what country his character would hail from. Pepperman said: "He's not from another country, he's from another world."
The Spanish distributors for the movie decided, instead of translating the title, to simply add an "a" at the end, making it "Phantasma". The word itself does not exist in the Spanish language, but sounds phonetically the same as "Fantasma" (Ghost).
The line of dialogue "The funeral is about to begin, Sir" was used by black metal band "Marduk" in their track 'Hearse', from the album 'World Funeral' (2003), and also by the death metal band "The Ravenous" in a track from their first album "Assembled in Blasphemy" (2000).
Don Coscarelli's mother, novelist Kate Coscarelli, held several titles on the production and even used two aliases, "S. Tyler" and "Shirley Mae", for production design and make up/costume design respectively. She also wrote a novel adaptation based on the film. It was published in 2002 and only 500 copies were produced.