Atom Egoyan says that the film was inspired by three experiences: being taken to a lesbian club where women onstage performed as men; having a tax auditor suggest to him (incorrectly) that he was being cheated by a business partner; and realizing as a teenager that a friend was trapped in an incestuous relationship.
The director's wife, Arsinée Khanjian, was seven months pregnant when her parts in the movie were filmed.
When the film was being advertised through newspapers in the Philippines, the banner states "Strong warning by the MTRCB (Movie and Television Ratings Classification Board) - strictly for adults only. This film is approved without cuts because of its artistic value."
The Exotica club was built in May 1993 out of an empty room at the Party Center in Toronto. It was so convincing potential customers had to be turned away at the door.
Writer/Director Atom Egoyan's own 1990 Volvo 240 station wagon was used as Francis's car to save money.