Peter Briggs wrote a version of the script while the project was still at Miramax. Before writing the script, Briggs re-watched all the "Highlander" movies as well as the TV series, then joined the official Highlander message boards (www.highlander-community.com) and researched what fans wanted in a sequel. He kept his identity secret, but was known to be an insider on the project. He soon became one of the most popular and respected members of the board, and remained so even after he was kicked off the project. He revealed his identity well after he was kicked off the project. It was the death of a close friend on the forum, named Eric, that sparked Briggs to finally reveal himself.
Adrian Paul had originally turned down reprising his role of Duncan in this film as he was extremely disappointed on the performance of Highlander: Endgame (2000). He also believed that the franchise wad not worth continuing with. The producers then contacted Christopher Lambert about reprising his role of Connor MacLeod in the movie. But Lambert demanded a lot of money and he was dropped. Eventually, the producers were able to convince Paul to reprise his role.
David Abramowitz was called in to rework the original script by Stephen Kelvin Watkins after the producers had doubts about whether it would work. Abramowitz did a major overhaul of the script in an effort to bring it more in line with prior Highlander mythos, but the producers later changed their mind and largely re-instated Watkins' original script, keeping only a few of the modifications Abramowitz made. While the initial, leaked cut of the film credited Abramowitz as a co-writer, he was so displeased with the results that he took his name off of the final version.
Russell Mulcahy was attached to direct the film early in development. Mulcahy disagreed with Peter S. Davis and William N. Panzer on the direction of the story, as he wanted it to be a prequel focusing around the first-ever generation of immortals, thousands of years before the original Highlander (1986), with Adrian Paul only appearing as Duncan MacLeod in a framing story. On the other hand, Panzer and Davis wanted to follow up Highlander: Endgame (2000) and have Duncan appear throughout the whole film. Eventually, Mulcahy left the production, feeling that a repeat of the events that resulted in the critical and commercial failure of Highlander II: The Quickening (1991) was about to happen.
Joel Soisson's version of the script featured Duncan MacLeod living in a gas station in the middle of the desert, next to a run-down airplane. Also in the script, MacLeod smoked, wore cowboy boots and a hat, and had a pet monkey named Connor.
Although "Highlander: The Source" did poorly with critics and with fans. It had been intended to be the final chapter of the franchise, ending with Duncan finally winning The Prize and Anna revealing she is pregnant with their baby. In the "Highlander" mythology, immortals cannot have children with mortals.
In the original version of the extended ending, after Anna reveals to Duncan, that she is pregnant. Duncan helps Anna to raise their son in the Highlands of Scotland and they name him after an great immortal, Connor MacLeod and is a Highlander like him.