Writer-director Bill Forsyth said in "Local Hero: The Making of the Film" (1983) by Alan Hunter and Mark Astaire: "I saw it along the lines of a Scottish Beverly Hillbillies -- what would happen to a small community when it suddenly became immensely rich -- that was the germ of the idea and the story built itself from there. It seemed to contain a similar theme to Brigadoon (1954), which also involved some Americans coming over to Scotland, becoming part of a small community, being changed by the experience and affecting the place in their own way. I feel close in spirit to the Powell and Pressburger feeling, the idea of trying to present a cosmic viewpoint to people, but through the most ordinary things. And because both this film and 'I Know Where I'm Going!' (1945) are set in Scotland, I've felt from the beginning that we're walking the same... treading the same water."
The village seen in the movie was not near the beach that the characters walk on, they were on opposite sides of Scotland. To make the connection, a cardboard church was built at the end of the beach to match the church in the village.
The scene inside the church (when the villagers were gathered together) was shot at the long disused Polnish chapel beside the A830 on the Road to the Isles, as the road rises up from Lochailort towards Arisaig. The mock-up chapel beside Camusdarach beach was virtually identical to the exterior of Polnish Chapel, which is on the Buildings at Risk Register for Scotland.
During the opening credits, Mac can be seen driving his car while a radio station provides the background dialog. The radio station identifies itself as KNOX, which is the same name of the oil company that Mac works for.
The 'Scottish Sun' newspaper once reported that the Warner Bros. studio wanted actor Henry Winkler for the lead role of Mac which was rejected by director Bill Forsyth. Mac was cast with Peter Riegert.
In Happer's penthouse office near the beginning of the film, when he tells Moritz to get out and then calls him back, the door swings open and canned "elevator" music is just audible, playing very softly outside the office. The melody is Victor's song which appears much later at the ceilidh, "Even the Lone Star State gets Lonesome."
When Victor the Russian arrives, the first person he kisses is a small child, dressed exactly as he is (white turtleneck sweater, black pants) and same hair (black, long, curly). The child is held up by a blonde woman, joined by the old lady and the shopkeeper, all of whom are smitten with Victor throughout.
Mac's apartment building in Houston is The Willowick located at 2200 Willowick Road. When he walks outside at the end of the film, you can initially see past River Oaks to Downtown in the distance, followed by Lamar Tower, a set of buildings in Greenway Plaza and the AT&T building further down Willowick. While the film portrays the location as being heavily urban, in reality it was and remains mostly residential.
Mark Knopfler provided not only the main score, mostly consisting of classical guitar (which would become his cinematic trademark for The Princess Bride), but filled the fast-fingered country guitar licks during the KNOX radio station announcement while Mac is driving in the film's opening.
The trivia item below may give away important plot points.
Bill Forsyth wanted the film to end with Macintyre alone in his apartment in Houston. After photography had finished, Warner Bros insisted on an upbeat ending. The ambiguous final shot was added as a compromise, using leftover footage.