After Alien became a hit in 1979, its production company spent years trying to persuade 20th Century Fox to make a sequel, because executives thought the first film's success was a fluke. Fox eventually financed development, and the project passed through several producers and writers before James Cameron, who had just made The Terminator, was given the job. Cameron combined the horror of the original with the action of his own film, and he wrote Ellen Ripley as a strong heroine, not a typical action hero. Negotiations with Sigourney Weaver were long, and at one point the writers told her agent they would write Ripley out of the movie. Fox's executives were concerned about the budget, and Cameron and his producer Gale Anne Hurd twice walked away before the studio agreed to fund the picture. Cameron later described the difference between the films: the first is a haunted house, and this one is a roller coaster.

Hampi is a UNESCO World Heritage Site in Karnataka, India, with more than 1,600 surviving remains spread over 4,100 hectares. It was the capital of the Vijayanagara Empire from 1336 to 1565. Travellers from Persia and Portugal described it as a prosperous, wealthy and grand city with temples, markets and farms along the Tungabhadra River. By 1500 it was estimated to be the world's second-largest city after Beijing, and probably India's richest at the time. In 1565 a coalition of Muslim sultanates defeated the Vijayanagara Empire, its capital was conquered and destroyed, and the city was left in ruins. Hampi remains a religious centre, with the active Virupaksha Temple at its heart.