Robert Towne had originally planned a trilogy of movies chronicling at eleven-year intervals (in narrative terms) the development and decline of southern California as the result of rapacious developers and tycoons. Chinatown (1974) had been water rights, The Two Jakes (1990) was to deal with oil and a third movie, set in the 1950s, would deal with pollution caused by the building of the freeway system. The final movie was to be called "Gittes vs. Gittes" in which Jake would get a divorce.
Writer Robert Towne, producer Robert Evans and director Jack Nicholson founded the production company T.E.N. in 1985 just to produce this film. When legal and financial problems occurred, Nicholson finished the project alone.
The movie's trouble production start was summarized in an article in the 10th September 1989 edition of 'The New York Times'. It reported: "Paramount almost made the picture four years ago with Mr. Nicholson, Mr. Towne and 'Robert Evans' as financial partners in the venture. Mr. Towne was to direct and Mr. Evans, the producer of Chinatown (1974) in 1974, was to produce and also play the second Jake opposite Mr. Nicholson. But Mr. Towne suddenly decided that Mr. Evans wasn't a strong enough actor and tried to drop him from the part. Mr. Evans balked. There was a vicious fight between the two. The film fell apart. A million dollars' worth of sets were torn down, and the lawsuits commenced. 'I was the only person who had any money, so the lawsuits went after me', Mr. Nicholson says. 'It bored me to death. When I work, I don't just step in and learn my lines. I have to plan a year in advance. And I had to work my schedule around the lawsuits'. It was Mr. Nicholson who mended the project, patiently cementing the pieces back together a year ago".
Robert Evans underwent major plastic surgery before the film began, reportedly bringing pictures of cats with him to get the look he wanted. Jack Nicholson and Robert Towne were horrified when they saw the results because Evans had become unrecognizable.
Producer Robert Evans was tapped early on to play the "second" Jake. Writer Robert Towne (who had hoped to direct the film) didn't think that Evans was up to the job and fired him, and Jack Nicholson became the picture's director. This film is/was the second in a planned trilogy of films.
Harvey Keitel's line to Jack Nicholson: "You know something, Jake, you might think you know what's going on around here, but... you don't." is almost a verbatim line spoken by John Huston in "Chinatown."
'Rating the Movies' stated that "this follow-up to Roman Polanski's Chinatown (1974) had a rocky road from inception to release. The project had been in the works for several years, and the actual production was plagued by delays and personnel changes".
The make and model of the car that J.J. Gittes (Jack Nicholson) drives the most in the movie, is a gray 1948-49 Hudson Brougham Super Convertible, though it has been speculated on the IMCDB that the vehicle may be a 1950 model, which would make it anachronistic, as the picture is set in 1948.
The make and model of the murder weapon according to the film was a Smith and Wesson .38 calibre police special with a twin inch gun-barrel. According to the IMFDb, the firearm is a Smith & Wesson Model 36 snubnose revolver, the gun being an anachronism in the movie, it was introduced in 1950, and wasn't in issue at the time the film is set (1948).
When the film was originally conceived in the mid-1980s, Cathy Moriarty was set to star opposite Jack Nicholson. However, repeated production delays and Moriarty's physical and emotional rehabilitation following a devastating automobile accident ultimately cost her the part.