Was originally supposed to be released direct to video but the studio eventually settled on a theatrical release because the first Shiloh (1997) had performed very strongly on home video. However it's theatrical release was very limited.
Although Shiloh had total of 3 books originally the producers were not planning to adapt the second or third books into films as the first Shiloh (1997) had received very little publicity and only saw a limited release resulting in a very low box office return. However the first film performed very well on home video due to rentals and sales that a sequel was commissioned immediately following the fact.
Zachary Browne had auditioned as Marty for the first Shiloh (1997) but was rejected because producers thought he was too young for the role. It is unknown why Blake Heron did not return as Marty for this sequel but when it was clear he wouldn't return, producer Dale Rosenbloom remembered Browne's previous auditions and decided to re-cast him as Marty.
Michael Moriarty was concerned that he played his role of Ray Preston a little too seriously in the first Shiloh (1997) and came across as aloof and too much of a strict authoritarian. In the books although Ray is a very strict father he is also exceptionally loving towards his children and always encourages them to think about what is right. Moriarty requested that Ray be more loving and even a little bit more fun in the sequel, so Ray's strict demeanor was toned down significantly for the sequel.
J. Madison Wright was set to reprise her role as Sam Wallace and wanted to do the sequel but when Blake Heron who played Marty in the original Shiloh (1997) said no to doing the sequel, it was decided to re-cast all of the kid actors to maintain more consistency in the cast. The only newcomer to the cast for the sequel was Joe Pichler playing David Howard. In Shiloh (1997) David is mentioned by name but is never seen. In this movie he is a supporting character and Marty's best friend.