A number of up-and-coming special effects artists worked on the film, including Rick Baker, Jim Danforth, David Allen, and Dennis Muren. The effects ended up being so good that the film was actually in line for an Oscar nomination for visual effects; however, the Academy chose not to give an award in that category that year because so few films had featured visual effects.
The producers were plagued with financial difficulties and many of the crew members went unpaid. FX man David Allen was so apprehensive about working on the film that he insisted on being paid cash at the end of each day, but his fellow crew members weren't so lucky. After a series of long delays resulting in unpaid salaries, ten of the FX members decided to hold 8,000 feet of the film's effects sequences hostage until the producers forked over their wages.
The film's live-action sequences were shot first on 16mm film and the FX sequences were shot later on 35mm. The live-action footage had to be blown-up to 35mm, resulting in some blurriness when the elements were composited together.
Hardcore sequences were seized by police in a raid. The director was forced to view the film in the judge's chambers and all hardcore material was removed.
The original version of the Penisaurus was scrapped because it bore such an uncanny similarity to a human penis that it made the animators uncomfortable to work with.