The old building that became Xanadu was the Pan Pacific Auditorium on Western Avenue, near CBS's Television City in Hollywood, California. It was built in 1935 and demolished in 1989.

The set of the Xanadu club cost $1,000,000 to build.

Gene Kelly took the part of Danny MaGuire because filming was a short drive from his Beverly Hills home and he could be close to his family at the same time.

"Don't Walk Away," an animated sequence in the film, features scenes nearly identical to portions of Thumbelina (1994), namely a shot of a small girl walking behind a leaf. Both were directed by Don Bluth.

Playing on a 99-cent double-feature with Village People in Can't Stop the Music (1980), this inspired John Wilson to create the Razzie Awards, dis-honoring worst achievements in film. It later won the first ever Worst Director Razzie Award for Robert Greenwald.

The mural depicted in the film never existed. Rather, it was a digital image superimposed over one of the shops in an alleyway on Dudley Avenue and Ocean Front Walk in Santa Monica, California during post-production.

Famously received the one sentence review: "In a word, Xana-don't."

Following on the heels of Olivia Newton-John's enormous success in Grease (1978), this was meant to launch her career as a solo star. Its complete failure at the American box office ensured that this would be the one and only time she ever received top billing without a co-star in a theatrical release.

VARIETY's review of this film referred to Olivia Newton-John's character as "a rollerskating lightbulb."

The title comes from a Samuel Taylor Coleridge poem called "Kubla Khan". The same name was also used as the name of Charles Foster Kane's residence in Citizen Kane (1941).

Olivia Newton-John fractured her coccyx while filming the dance sequence "Suddenly".

According to Olivia Newton-John, filming began without a finished script; it was written as filming went on.

In the two-page booklet included with the DVD, it is stated that the film was originally conceived as a straight-on roller-disco movie, but that the imminent release of two quickie roller-disco films (Skatetown, U.S.A. (1979) and Roller Boogie (1979)) prompted many changes (like its blending of '40s and '80s styles), which may explain why star Olivia Newton-John complained of the film being written while it was being made.

Though an infamous flop initially, it has since achieved "cult" status, and like other failed musicals of its time (The Apple (1980) and _Can't Stop The Music (1980)_), is quite popular with gay audiences.

The original budget was $4 million, but as producer 'Joel Silver' developed it, costs rose to $13 million. Universal head Ned Tanen fired Silver, who immediately went to work for his friend and mentor 'Lawrence Gordon' - who was also a producer on the film, so Silver was back on the project.

Despite the failure of the film at the box office, the soundtrack was an enormous success. The song "Magic" went to #1 on the U.S. pop singles chart.

The studio logo is done in 1930s style, with an airplane circling a globe; after going behind the globe, it becomes a modern jet, and on the third time around it becomes a spaceship.