Filmed in British Columbia in 1978, this movie marked the beginning of the "Hollywood North", the major start to the development of a massive film production business in Vancouver and other parts of the province of British Columbia, in Canada. Since then hundreds of "American" movies have been filmed in the Canadian province.
According to the Science Fiction, Horror and Fantasy Review, "David Seltzer has taken the basics of Prophecy (1979) from a real-life apocalypse - the environmental disaster in the Japanese city of Minimata, which came to light in 1958 where it was discovered that mercury waste being dumped into a nearby river from a chemical plant had caused severe mutations and neurological degenerations among the locals. The effects of this consisted of loss of muscular control, vision and hearing, followed eventually by insanity and paralysis".
The film was shot under tight security. No visitors were allowed to the sets, including studio personnel. Crew and actors had to pledge secrecy and not reveal any elements of the story under any circumstances. No still cameras were allowed except for the production's official still photographer and a retired CIA agent was hired to supervise the security.
According to Wikipedia, "the original concept for Katahdin was considerably more terrifying than what would eventually show up on screen. However, when director John Frankenheimer saw the concept, he suggested that it should be altered to look more 'bear-like'. Interestingly, the original concept was actually quite close to the poster art".
According to the Q-Network Entertainment Portal, this movie was "was part of a string of horror movies in the 1970s and early '80s in which monsters were spawned from environmental pollution and human tampering with nature".
A novelization of the movie was first published in 1979 the same year as the film premiered. Its dust-jacket tagline was: "A Novel of Unrelenting Terror". The book was also written by the film's screenwriter David Seltzer. According to Wikipedia, the "novelization of the film contains numerous differences from the film, as well as considerable background information on all of the characters".
According to director John Frankenheimer, during post-production, the studio demanded that the film be cut from an R rating down to a PG. Frankenheimer felt this damaged the film, destroying the scariness it had created.