The film started as a collaboration between Henson and Froud following their previous collaboration "The Dark Crystal" (1982). Terry Jones of Monty Python wrote the first draft of the film's script early in 1984, drawing on Froud's sketches for inspiration. Various other scriptwriters rewrote it and added to it, including Laura Phillips, Lucas, Dennis Lee, and Elaine May—although Jones received the film's sole screenwriting credit. It was shot on location in Upper Nyack, Piermont, and Haverstraw, New York, and at Elstree Studios and West Wycombe Park in the United Kingdom.