While shooting, according to Roy Horan, there were many conflicts between the U.S., Hong Kong and Thai crews. The explosives crew had access to handguns and they also had Thai Special Forces and Thai police involved in the film. The crew did not have access to movie-guns, so all the weapons were real live guns with live ammunition.
Cynthia Rothrock's character of Terry was the primary inspiration for the character Sonya Blade in the original Mortal Kombat (1992).
In a fairly recent interview on YouTube with Ric Draisin on his show 'Ric's Corner', Matthias Hues claimed he was paid around $6000 for his work on the film, which ran out quickly. He said the result was a period of homelessness, as the film wasn't released for around one year so he wasn't getting other film offers for a while.
According to Roy Horan, Matthias Hues possessed reasonable acting ability but couldn't perform even basic stage combat at the time of his casting. Nevertheless, Hues was athletic, so Horan had Jeong-lee Hwang train him in martial arts and fight choreography. Director Corey Yuen and the entire crew were very impressed with his progress.
The movie was never meant to be a direct sequel to No Retreat, No Surrender (1986). In an interview, Keith W. Strandberg claims that the title was decided on because of the popularity of the first film. Jean-Claude Van Damme and Kurt McKinney were set to star because of their contracts with the Seasonal Film Corporation but would not have reprised their roles from the original movie.