Nayakan is loosely based on the life of the Bombay underworld Don Varadarajan Mudaliar and the American film The Godfather (1972). Ratnam was initially approached to remake the Hindi film Pagla Kahin Ka (1970) for Srinivasan and Haasan but refused. He instead suggested two other stories, one of which impressed Haasan and became Nayakan. Cinematography was handled by P. C. Sreeram, and editing by B. Lenin and V. T. Vijayan. Filming began in late 1986, taking place primarily in Madras and to a lesser extent, Bombay.
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