A. K. Lohithadas got the plot idea from a story that circulated in his locality about an incident that happened in Chalakudy that narrates how a carpenter knocked down a notorious criminal named Keshavan with a single hit. Lohithadas, who was unable to attend the wedding of Sibi Malayil, wrote the screenplay of "Kireedam" as a compensation gift for Malayil. He completed the screenplay in just six days. Filming was completed in 25 days in Thiruvananthapuram. The film cost ₹23.5 lakh to make, produced by Dinesh Panicker and N. Krishnakumar under the company Kripa Films. Mohanlal, who used to receive ₹4.5 lakh as remuneration at that time took only ₹4 lakh for his friendship with Krishnakumar. "Kireedam" (crown) was originally the title given by Lohithadas for his previous screenplay, directed by I. V. Sasi. But Sasi did not liked the name and had a dispute with Lohithadas. Malayil on hearing this incident from Lohithadas said he would like to adopt the title for his film. Sasi's film was released under the title "Mukthi" (1988).