To save money, the Cannon Movie Tales films were shot two or three at-a-time. Hansel and Gretel was shot simultaneously with Sleeping Beauty (1987). This wasn't the best of situations in that often the two crews would be competing for the limited equipment, costumes, and sets.
There was a lot of debate as to how to destroy the witch's house at the end of the movie. Some wanted to blow it up, and director Len Talan wanted to take it apart in stop-action, to have it turn to ruins, which was too time-consuming. Finally the construction supervisor, Aria Benishay, came up with an idea. He contacted the local fire department near the woods where the witch's house had been built and got them to assist the crew by pumping fire-fighting foam through the back of the set and out the windows and roof. Large quantities of food coloring were added, and with a couple of fireballs and colored smoke bombs, they had their scene.
Part of the "Cannon Movie Tales" series, nine feature films based on classic fairy tales that were produced by Menahem Golan and Yoram Globus for the Cannon Group in the mid '80s. All of the films featured well-known actors from the U.S. and U.K. and were shot on-location in Israel. Although the series was originally conceived as a whopping sixteen films, production stopped at nine when Rumpelstiltskin (1987) flopped at the box-office and the remaining films were sent directly to video. Despite their commercial failure, the Movie Tales garnered a cult following after the Disney Channel began airing them as "Storybook Cinema" in 1988.
Cloris Leachman hates cigarette smoke and had to wear a lot of prosthetic make-up for her part as the witch. Due to frequent on-set smoking by crew members, the smoke would get into her mask and irritate her. She begged them not to smoke near her, which they begrudgingly tried to remember.
Nicola Stapleton, who played Gretel, was actually 13-years-old at the time of filming, three years older than Hugh Pollard, who as Hansel was supposed to be playing her older brother. There was a lot of playful competition between the two young stars as to who could remember their lines better.