The film is loosely based on the German Krupp family of steel industrialists from Essen, and is also inspired by Shakespeare's Macbeth.

German authorities frequently denied filming permits and forced Visconti and his screenwriters to sign a statement declaring that the characters had nothing to do with the Krupp family.

During the shooting of the scene reimagining the Night of the Long Knives in Unterach am Attersee, Austria, the crew was harassed by pro-Nazi sympathizers gathered near the set who threw vegetables and shouted at them.

Principal photography ran from July 1 to September 1, 1968, across Austria, West Germany (Düsseldorf, Essen, North Rhine-Westphalia) and Italy (Cinecittà Studios and Terni, where the Essenbeck steelworks scenes were filmed).

The Damned was the breakthrough film for Helmut Berger, who received an 'Introducing' credit despite having already appeared in Visconti's segment of the anthology film The Witches; Berger was also romantically involved with Visconti at the time.

Dirk Bogarde later expressed disappointment that Visconti sacrificed his character's development to focus more on Helmut Berger's role, specifically citing a long scene of his character's guilt after the murder that was filmed but ultimately cut.

Composer Maurice Jarre was hired by the producers without Visconti's knowledge; Visconti had originally wanted the film scored entirely with pre-existing classical music by Gustav Mahler and Richard Wagner, and reportedly compared Jarre's work unfavorably to his score for Doctor Zhivago, though contractual obligations forced its use.

During his performance in front of the family, Martin's character imitates Marlene Dietrich in Josef von Sternberg's The Blue Angel; Dietrich herself praised Helmut Berger, sending him a note saying 'you were even better than me!'

Karl Hass, a Nazi war criminal responsible for the Ardeatine massacre who was not charged until 1998, appeared in the film as an extra; some sources suggest he was even employed as a technical advisor, though it is unknown if the filmmakers knew his identity at the time.

The film received an X rating from the MPAA in the US due to a nude incest scene; Warner Bros. later resubmitted it in 1979 and the rating was changed to R, with this uncut version released on DVD in 2004.

When shown on CBS late night television in February 1972, the film was heavily edited by 25 minutes, prompting one executive to joke it should be retitled 'The Darned'; affiliate stations in Baltimore and Washington D.C. refused to air it, and it was technically the first X-rated film shown on American network television.

Filmmaker Rainer Werner Fassbinder named The Damned his favorite film, saying it was perhaps as significant to film history as Shakespeare was to theater.