According to director Paul Lynch in Going to Pieces: The Rise and Fall of the Slasher Film (2006), he was having difficulty securing financing until Jamie Lee Curtis signed on. Once the film was shot, Paramount expressed interest in distributing the movie, but they only wanted to open it in 300 theaters whereas Avco Embassy Pictures offered to release it in 1200 theaters. Avco Embassy released Prom Night as a result. That same year, Paramount released another independent slasher film, Friday the 13th (1980).
Casey Stevens had trouble keeping up with Jamie Lee Curtis during the filming of the dance scenes, as she was a well trained dancer who did all her own dance moves while he was inexperienced. A dance double had to be used for Stevens when the dancing got too difficult for him.
According to Paul Zaza, the prom scene was shot with actual disco hits that the production company later realized they could not afford the rights to. This gave Zaza a week and a half to create similar, original disco songs for this movie that were close, but not so close that they could be sued.