Initially, Zito had wanted to shoot "The Prowler" in Avalon, California, where it is set. However, it was decided by Zito to shoot the film in Cape May, New Jersey instead, which he felt had a "ghost town quality." The film was shot over a period of six weeks, which each consisted of six days' work, beginning in October 1980. Contemporaneous newspaper reports cite a budget of between $400,000 and $500,000, though Zito has stated that the film ultimately cost $1 million to produce. During production, the film had the working title "Graduation".