Stephen King was such a huge fan of Evil Dead (1981) that he convinced producer Dino De Laurentiis over dinner (who was producing King's Maximum Overdrive (1986) at the time) to have his production company DEG (De Laurentiis Entertainment Group) finance Evil Dead II.
Although the cabin is supposed to be the same as the one from Evil Dead (1981), that movie was shot in Morristown, Tennessee; the sequel was filmed nearly 270 miles to the east, in Wadesboro, North Carolina. Most of the film was shot on a set built inside the gymnasium of Wadesboro's J.R. Faison Junior High School. Financer Dino De Laurentiis had originally offered his studio in Wilmington, but director Sam Raimi chose Wadesboro, a 3-hour drive away, fearing that being so close to De Laurentiis' office would lead to studio interference.
Sam Raimi credits Stephen King with making this film possible. Raimi couldn't acquire enough money to fund the production, so King, a huge fan of the original, convinced financiers to give Raimi the money he needed for a second movie. Raimi later made appearances in the miniseries Le Fléau (1994) and Shining : Les Couloirs de la peur (1997), both written by King.
The large demonic head Ash battles in the climax of the film, which the crew nicknamed the "rotten applehead," was too large and cumbersome for the crew to carry back to California, so it was left in North Carolina and soon disappeared. Its whereabouts were unknown for a number of years until it was found in a Halloween haunted house attraction just outside the original shooting location of Wadesboro, North Carolina.
Bruce Campbell completely improvised the scene where he fights his possessed hand in the kitchen of the cabin. Sam Raimi praised his performance and used the first take for the film.