In late 1987, executive producer-screenwriter
Nora Ephron presented the concept for
My Blue Heaven to actress
Goldie Hawn, who initially expressed interest in the role of the district attorney. The project was under development at
Warner Bros. Pictures with Allyn Stewart when a
Writers Guild strike lasting twenty-two weeks began in March 1988, causing a delay in Ephron's completion of the script. In early 1989, Hawn declined the role, but she and her business partner,
Anthea Sylbert, retained their positions as executive producer and producer, respectively. The search for a prominent actor to lead the film commenced, with
Steve Martin expressing interest in portraying the FBI agent. However, after
Danny DeVito turned down the gangster role, Ephron suggested Martin consider the lead. At one point,
Arnold Schwarzenegger was cast as Antonelli but left the project after receiving the lead role in
Kindergarten Cop. After Martin agreed to take his place, producers cast
Rick Moranis as Coopersmith. Director
Herbert Ross became available due to a delay in a different project, and production commenced in October 1989. Ross aimed to transcend mere escapist comedy, emphasizing the notion that "safety and comfort [lie in] middle-class values," asserting that fundamentally "everyone is middle class," even the gangster, who transforms into a "pillar of the suburban community." Ephron informed Martin that his character was more about hyperactivity than an accent. A pivotal moment in character creation occurred when Martin introduced an old costume from his former nightclub act—a "shiny, silver-gray jacket." Costume designer Joe Aulisi then crafted twenty-two light-colored designer suits in silks and sharkskins, featuring wide shoulders, lapels, and tight trousers to achieve a distinctive "lounge-lizard look." The fictional town of Fryburg, California, was crafted using various locations, including
San Luis Obispo,
San Diego,
Los Angeles,
Atascadero, and
Paso Robles, California. Some exterior scenes were filmed at
Jack Murphy Stadium and the
Hotel del Coronado terrace in San Diego, as well as the entrance of
Atascadero city hall. During post-production, the ending of the story underwent a modification to adopt a "kinder, gentler ending." ==Music==