Although set in Okinawa, the film was actually shot in Oahu, Hawaii. The island was chosen because of its similar climate to Japan, its large Okinawan population and the convenience of shooting on US soil.
Work on Karate Kid II: Entscheidung in Okinawa (1986) started ten days after the release of Karate Kid (1984).
According to Martin Kove, the blood on his hands when he broke the windows was real and was an accident on-set. The footage was left in the final cut. And he still has the scars from filming.
Tamlyn Tomita became great friends with Nobu McCarthy on the set of the film, effectively adopting the older actress as her mentor. Tomita was greatly affected by McCarthy's sudden death at the age of 67 in 2002 when they were making Gaijin: Ama-me Como Sou (2005) together in Brazil.