The exterior of the Chicken Ranch was erected on the Universal lot where the Bates house from Psycho (1960) originally stood. The Bates house was moved to a more permanent location when filming began on Psycho II (1983). The set is still up on the Universal lot in 2011 and was used in "The Ghost Whisperer".
The film went over budget because of the various production problems. Several directors came and went, the script was always being rewritten and Dolly Parton wrote several more songs than were eventually included.
This was based upon a true story in which investigative reporter Marvin Zindler (who inspired Dom DeLuise's "Melvin P. Thorpe" character) closed down the "Chicken Ranch" brothel in LaGrange, Texas, in 1973. Zindler remained with ABC affiliate KTRK-TV in Houston until his death in 2007.
Dom DeLuise's character, Melvin P. Thorpe is based on the real newsman, Marvin Zindler (b. 1921, d. 7/29/07) who brought down the real Chicken Ranch. The incident where the sheriff snatches the wig off Thorpe's head and holds it high really happened between the La Grange county sheriff and Zindler. Zindler also pioneered "rat and roach" reports about restaurant cleanliness ("Slime in the Ice Machine!"),
Marvin Zindler, on which Melvin P. Thorpe is based, liked the play but didn't like the film. Zindler said that his crusade against the Chicken Ranch has been taken out of context. He wasn't trying to get it closed down because of the prostitution, but because of the Ranch's reported ties to organized crime and other shady business dealings.
The original Broadway production of "The Best Little Whorehouse in Texas" opened at the 46th Street Theater on June 19, 1978 and ran for 1584 performances. The musical on which the movie version was based was nominated for the 1979 Tony Award for Best Musical and the 1979 Tony Award for Best Book of a Musical.
Betty Grable's stepson, Tim James, natural son of big band leader Harry James, was an attorney working with the then Attorney General of Texas and became responsible for enticing TV personality Marvin Zindler of Houston to investigate the famous Chicken Ranch brothel in La Grange, Texas - eventually closing it down.
The scenes shot in the Austin, Texas Capitol Building were filmed from October 6-9, 1981. The bulk of the footage was shot at night in order to keep from inconveniencing workers and visitors - though many workers lost their parking spaces that week to make room for the studio's 18 wheelers.