Originally intended by Dario Argento as a comeback for colleague (though not friend) Lucio Fulci. Unfortunately, only a few weeks before filming was about to begin, Fulci died and on short notice, the directing job was handed over to special effects expert Sergio Stivaletti.
On speaking of his rivalry between himself and Lucio Fulci, Dario Argento stated that at the Rome Fanta Festival in 1994, he saw Fulci in a wheelchair, describing him as being in a "dreadful physical condition". Argento was informed that Fulci was about to have a serious hospital operation. Argento felt that working would help Fulci recover, and decided to back him in a project of his choosing. Initial plans for a project involved doing a modern adaptation of The Mummy (1932) with Dardano Sacchetti working on a screenplay. The project later became a remake of André De Toth's House of Wax (1953). Argento liked this idea, and screened copies of de Toth's film as well as Mystery of the Wax Museum (1933). Fulci and his collaborator Daniele Stroppa decided to declare Gaston Leroux's short story "The Waxwork Museum" as their official source of inspiration in case they had any legal problems with Warner Bros..
According to Alan Jones, Lucio Fulci and Dario Argento argued about the direction of the film, with Fulci wanting a more atmosphere driven film while Argento wanted to increase the gore.
Sergio Stivaletti stated that he was shocked when Dario Argento contacted him, finding that he "had been looking or a chance to direct and thought it would be with [his] own film and script. Feeling that he was in the right place at the right time, he accepted the offer. Stivaletti made changes to Lucio Fulci script, tailoring it to his interest in special effects.
A lot of the interiors for the wax museum were filmed in a warehouse in Rome, Italy.