Originally proposed by brief Hammer cohort Kenneth Hyman, this movie was planned to be the first in a series of many Sherlock Holmes movies starring Peter Cushing, produced by Hammer Films. When the audiences disapproved of a Hammer movie without any monsters and failed to turn up in great numbers, the planned series was subsequently dropped.
For his role as Sherlock Holmes Peter Cushing had to regularly have a pipe in his mouth. However, Cushing didn't like the taste of the pipe so he kept a glass of milk handy to remove the taste.
André Morell was one of the first movie portrayals to show Watson as a more than competent colleague of Holmes, rather than the lovable buffoon that Nigel Bruce had portrayed.
Peter Cushing would often make amendments to his script. For example, the dialogue where he inquires about how much he's getting paid was changed to "My professional charges are upon a fixed scale. I do not vary them, except when I remit them altogether," is a direct quote from Doyle (though from "The Problem of Thor Bridge" rather than from "The Hound of the Baskervilles").
To this day the movie is still released in a censored version for the British market. Two scenes of note include: The scene where Sir Hugo Baskerville pushes a servant into a burning fireplace is trimmed a few seconds and when the local peasant girl is caught and murdered by Sir Hugo, there were more camera shots of the character using his dagger.