Al Pacino was director Brian De Palma's first choice for the role of Jack Terry. When he proved unavailable John Travolta was signed, prompting a suggestion from at least one studio executive to cast Olivia Newton-John, Travolta's Grease (1978) co-star, in the role of Sally (which De Palma refused).
The use of a split-focus diopter lens is evident in several scenes, in particular the sound recording scene and the hospital scene. The split-focus lens is attached to the main lens, and it affects only the left or right portion of the main lens' view. This changes the focal distance of part of the image, allowing objects at two distances (in the foreground and background) to be in sharp focus.
The underwater components of the car crash on the bridge set piece were shot in a huge tank in California. Nancy Allen suffers from claustrophobia and hence had a hard time with being trapped in the car in the underwater scenes.
During the editing process, two reels of footage from the Liberty Parade sequence were stolen and were never to be seen again. This meant that the scenes had to be reshot at a cost of $750,000. Cinematographer Vilmos Zsigmond was no longer available, so he was replaced by László Kovács.
The slasher movie sequence that is being dubbed at the beginning was shot by Garret Brown on his invention, the Steadicam. He was so skilled and fast on his feet with the rig that the crew struggled to keep up with him, Including the focus puller. When the "slasher" holds up the knife in front of the camera, that too is Garett Brown holding the knife as this was the only way to get the shot to work.
The scene in which Jack is telling Sally about how a battery leaked acid on Freddy Corso when he was wearing a wire was based on an incident from Robert Daley's book Prince of the City. Brian De Palma was interested in directing the film based from that book.