Filming began in Britain, but because of the Blitz - the German air raids on London - the production relocated to Hollywood. There was such a long break in production that Sabu's early scenes had to be reshot because he had grown several inches.
Lawrence W. Butler and Jack Whitney won an Academy award for Special Effects marking the first use of the "manual blue-screen technique". However it is not the first movie to use blue screens to separate layers, only the first to do so using color film instead of the black-and-white films created before using the Dunning Process.
Reportedly the favorite film of Francis Ford Coppola. When he first met Michael Powell, in a New York restaurant, Coppola introduced himself by walking across the room singing Sabu's song "I want to be a sailor" at the top of his lungs to show he was a fan.
Producer Alexander Korda was so demanding that he went through six directors during the production of this film, including his brother Zoltan Korda and leading art director William Cameron Menzies.
Douglas Fairbanks owned the rights to the title of the film, which had been one of his biggest hits, Le voleur de Bagdad (1924). After Alexander Korda decided to produce an epic version of one of the "1001 Arabian Nights" tales, he found the popularity and draw of Fairbanks' original title irresistible. In a 1938 banquet at the Savoy Hotel in London, Korda made sure he was seated next to Fairbanks and negotiated the rights to the film over dinner.