The screenplay was based on the 1991 French comedy film La Totale!, and a 2004 ruling by the Court of Appeal of Paris found that both films had actually been plagiarized from an unproduced 1981 screenplay called Émilie by Lucien Lambert.

True Lies was the first Lightstorm Entertainment project distributed under James Cameron's multimillion-dollar deal with 20th Century Fox, the first major production for Digital Domain (which Cameron co-founded), and the first film ever to cost $100 million to produce.

During filming of a horse scene, a camera boom struck the horse, causing it to spin and rear near a 90-foot drop; Arnold Schwarzenegger slid off and was caught by a stuntman, prompting him to praise stunt performers.

The film was shot over a seven-month schedule, using locations such as Rosecliff Mansion for the opening tango scenes, Ochre Court for the exterior of the Swiss chalet, and the Crystal Ballroom of the Millennium Biltmore Hotel for the closing ballroom scene and hotel lobby shots.

During production in 1993, James Cameron first met Jon Landau, the Fox executive assigned to oversee True Lies, who later left the studio to join Cameron's Lightstorm Entertainment and went on to co-produce Titanic and the Avatar series.

In 2018, Eliza Dushku alleged that she was sexually molested at age twelve by the film's stunt coordinator Joel Kramer during filming, and that she suffered broken ribs during a stunt shortly after an adult friend confronted him; Kramer has denied the allegations.

True Lies was the first film to use the 1994 20th Century Fox logo and fanfare, adapted and conducted by Bruce Broughton.

The film was banned in Indonesia in October 1994 after Muslim leaders objected to its portrayal of Islamic extremists, and it also drew criticism from Arab-American advocacy groups for its depiction of Middle Easterners.

A planned sequel, True Lies 2, was developed for years with writer Jeff Eastin and was set to reunite Schwarzenegger, Tom Arnold, and Jamie Lee Curtis, but it was ultimately abandoned after the September 11 attacks made the film's terrorism-based comedy feel inappropriate.