Due to bad experiences with his previous Universal movie Brazil (1985) which was re-cut by the studio against his wishes, Terry Gilliam only wanted to direct if he had final cut. The studio agreed, on the condition that he cast Bruce Willis so that a strong opening weekend would be guaranteed, and that the budget be kept small ($29 million). This meant that many of the actors worked for a smaller fee than usual, and the production designers had to cut corners wherever they could. Many of the props were made from cheaply obtained materials, and many scenes were shot in genuine abandoned factories and decrepit buildings. For example, the scenes in the insane asylum were shot in Eastern State Penitentiary, a now-unused prison in Philadelphia.

Bruce Willis took a lower salary than his star-status would normally entitle, partly because of budget restrictions, but mostly because he wanted to work with Terry Gilliam. Actually, he did the movie for free. It was only after the movie was released that he was paid. Brad Pitt was signed to this movie for a relatively small salary, when he was still an "up-and-coming" actor. By the time of the movie's release, however, Interview with the Vampire: The Vampire Chronicles (1994), Legends of the Fall (1994), and Se7en (1995) had been released, making Pitt a top-salary actor.