Kevin Williamson's script had originally been shelved before Columbia Pictures rushed it into production following the success of his screenplay for Scream (1996).

Producer Erik Feig pitched the idea of adapting Lois Duncan's 1973 novel to Mandalay Entertainment and hired Williamson to rework it into something closer to a 1980s-style slasher film rather than a straightforward adaptation.

Williamson was inspired by his own father, a former commercial fisherman, to relocate the story to a small fishing village and make the killer a hook-wielding fisherman.

The killer's hook weapon is a direct reference to the urban legend 'The Hook,' which the four main characters tell around a campfire early in the film as a way of signaling to the audience that a new twist on a classic legend was coming.

Jennifer Love Hewitt was initially considered for the role of Helen before being cast as lead Julie James, chosen for her ability to project vulnerability.

Melissa Joan Hart was offered a role in the film but turned it down because she felt it was too similar to Scream.

Ryan Phillippe was cast as Barry despite not matching the script's description of a 6-foot-2 quarterback type, based purely on his audition.

Anne Heche was cast in the small but pivotal role of Missy, which required only two days of filming but demanded she convincingly portray fear.

Principal photography lasted ten weeks starting March 31, 1997, with about seven weeks shot at night, which director Jim Gillespie said was physically taxing for cast and crew.

The opening coastal shots and car crash scene were filmed in Sonoma County, California (Kolmer Gulch near Jenner, on Highway 1), standing in for the North Carolina setting, while most other scenes were shot in Southport, North Carolina.

The campfire scene with the wrecked boat was inspired by a painting Gillespie had seen in a reference book, prompting the art department to buy an old boat in Bodega Bay and cut it in half for the set.

Gillespie discovered the Shiver's Department Store location in Southport and was so impressed that he rewrote parts of the script to use it as the setting for Helen's extended chase sequence.

The climactic scene where Julie screams 'What are you waiting for?!' in the street was reportedly conceived and directed by a child who won a contest to create a moment for the film; Jennifer Love Hewitt said she disliked the idea at first but it became one of the movie's biggest moments.

The final boat sequence was shot on an actual vessel on the Cape Fear River, and the crew nearly lost the boat while trying to dock it in rough waters, forcing them to halt filming and resume the next day.

Director Jim Gillespie deliberately avoided showing on-screen blood to keep the film from being overly gratuitous, but producer Erik Feig felt Elsa's throat-slashing scene looked 'medically impossible' without blood, prompting a reshoot with added visual effects blood splatter.

After test screenings, filmmakers decided an earlier death was needed to establish danger, leading to the addition of Max's murder in the crab factory, a scene not present in the original script.

The original ending featured Julie receiving an email reading 'I Still Know,' but this was scrapped in favor of the more dramatic shower-stall scene, which was filmed after principal photography on a soundstage next to where Hewitt was filming Party of Five.

Columbia Pictures and Mandalay marketed the film as being 'From the creator of Scream,' prompting Miramax to successfully sue for an injunction, arguing the tagline misleadingly implied Scream director Wes Craven's involvement; Williamson himself had already asked for the line's removal after seeing it on a poster.

Author Lois Duncan, who wrote the original novel, was reportedly 'appalled' that her story was turned into a slasher film, according to a 2002 interview.

The film has been parodied numerous times in popular culture, including in Scary Movie (2000), Shriek If You Know What I Did Last Friday the 13th (2000), the TV series Popular, The Simpsons' 'Treehouse of Horror X' segment 'I Know What You Diddily-Iddily-Did,' and Boy Meets World.