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Kurt Russell lifted weights and began running two months before production began in order to get ready for the physical demands of principal photography. In addition, Carpenter and his cast and crew did a week's rehearsals that mainly involved choreographing the martial arts scenes. 20th Century Fox was afraid that the production would create major overruns and hired Carpenter to direct because he could work fast. He was given only 10 weeks of pre-production.

Problems began to arise when Carpenter learned that the next Eddie Murphy vehicle, The Golden Child, featured a similar theme and was going to be released around the same time as Big Trouble in Little China. (As it happened, Carpenter was asked by Paramount Pictures to direct The Golden Child). He remarked in an interview, “How many adventure pictures dealing with Chinese mysticism have been released by the major studios in the past 20 years? For two of them to come along at the exact same time is more than mere coincidence”. To beat the rival production at being released in theaters, Big Trouble went into production in October 1985 so that it could open in July 1986, five months before The Golden Child’s Christmas release.

Production designer John Lloyd designed the elaborate underground sets and re-created Chinatown with three-story buildings, roads, streetlights, sewers and so on. This was necessary for the staging of complicated special effects and kung fu fight sequences that would have been very hard to do on location. This forced the filmmaker to shoot the film in 15 weeks with a $25 million budget. For the film’s many fight scenes Carpenter worked with martial arts choreographer James Lew, who literally planned out every move in advance. Says Carpenter, "I used every cheap gag – trampolines, wires, reverse movements and upside down sets. It was much like photographing a dance”. According to Carpenter, the studio "didn't get it" [his film] and made him write something that would explain the character of Jack Burton. Carpenter came up with the prologue scene between Egg Shen and the lawyer.