Golden Harvest attempted to make an English-language version of Mr. Vampire (1985) under the title "Demon Hunters." The film was produced by David Chan. However, the team could not get Ching-Ying Lam to reprise his role because the latter was busy with another film overseas. Wah Yuen, who worked on the original Mr. Vampire (1985), replaced Lam and handled the action sequences as well. American actor Jack Scalia, who acted in the 1978 television series Dallas (1978), was also recruited into the cast. Initially, Tanya Roberts from Charlie's Angels (1976) and Sheena (1984) was chosen. However, when that casting did not work out, Roberts was replaced by Michelle Phillips of the pop group Mamas & the Papas. They all flew out to Hong Kong to start filming at Golden Harvest Studios, but after several weeks of filming, the project was abandoned because Wah Yuen could not speak English very well. Raymond Man-Wai Chow pulled the plug, saying "we started but we need not finish". The Demon Hunters filmed footage still exists and is kept in the Golden Harvest Studios' archives.
This movie started a new wave of Chinese vampire movies in the 1980s to 1990s.
A real snake was used in the film because the production team was unable to afford an artificial one. A real chicken was also used in the scene where a chicken's blood is needed to fill a bowl.
Ching-Ying Lam was recommended to the director by Sammo Kam-Bo Hung to play the main role. The director had seen Ching-Ying before on The Prodigal Son (1981), which the director had worked on. The director noted in an interview that, "He seems cold but actually he is with a good heart." That explained why he was suitable for the role.