The working title "Tiger on the Beat 3" was a ruse by the Production company Cinema City to prevent another company from producing a sequel to their Born Hero 2 (1988)/Tiger on the Beat series, starring Conan Lee, the star of the previous two titles. After forcing the rival company to abandon the project, Cinema City retitled this movie to Skinny Tiger, Fatty Dragon - with no link to the earlier series.
Kuang Ni, who plays the father of Fatty (Sammo Hung), was also the script-writer on Sammo's earlier film, Der kleine Dicke mit dem Superschlag (1978).
Much of the film was recorded in Singapore, but the rest was filmed in the New Territories and Hong Kong.