Starring Nandamuri Balakrishna and Roja in lead roles, the film features Vijaya Rangaraja as the titular antagonist, Bhairava.

The story follows Vijay, a young man raised by a tribal chieftain, who embarks on a mission to rescue Princess Padmavati from the evil wizard Bhairava.

Produced by B. Venkatrama Reddy under the Chandamama Vijaya Pictures banner, Bhairava Dweepam aimed to revive the folklore-fantasy genre in Telugu cinema.

Filming began in June 1993, with principal photography taking place at Vijaya Vauhini Studios and various challenging outdoor locations, including a waterfall in Kemmangundi.

Cinematography was handled by Kabir Lal, and the film predominantly relied on practical effects, supplemented by a limited use of visual graphics.

Distraught, Jayachandra searches for her, but on a stormy night, Vasundhara loses her child, who is then found and raised by a tribal chieftain as Vijay.

Shattered, Vasundhara attempts suicide but is saved by a hermit, Jamadagni, who consoles her and gives her a flower that will bloom as long as her son is alive.

He sets off with his brother Kondanna, where he meets and falls in love with Princess Padmavati, the daughter of King Brahmananda Bhupathi, who reciprocates his feelings.

He believes that sacrificing a virgin born at sunrise under the Revati star and the Pisces zodiac sign will grant him immense powers.

Acting on this belief, Bhairava abducts Padmavathi, placing her under a trance and taking her to the island during a full moon night to perform the ritual.

The following morning, Padmavathi awakens with fragmented memories of the abduction and falls gravely ill. Doctors attribute her condition to black magic.

There, Vasundhara nurses his injuries and gifts him a protective bracelet to shield him from evil forces on his quest to rescue Padmavathi.

A pair of mischievous devils find him and recount their past as Bhairava's servants, who were freed by the kick of a blind Jayachandra.

Angered, the Yakshini curses Vijay, turning him into a vile creature, but tells him the necklace will be effective unless it falls or he reveals himself.

[6] Inspired by their father's legacy and the success of Pathala Bhairavi, the brothers sought to revive the "janapada" (folklore fantasy) genre in Telugu cinema.

Building on this, the brothers decided to produce Bhairava Dweepam as their second project, aiming to reinvigorate the folklore-fantasy genre, which had been underexplored since Mohini Sapatham (1986), directed by Vittalacharya.

In addition to overseeing production, he wrote the story, offering a fresh take on traditional folk tales, and also penned the dialogues.

[7] Nandamuri Balakrishna, impressed by the story's resemblance to Pathala Bhairavi—which starred his father, N. T. Rama Rao—readily agreed to play the lead role.

[8] In the film, Balakrishna plays an adventurous young man who is cursed and becomes a hunchback, marking a shift from his usual mass hero roles.

[12] K. R. Vijaya and Vijayakumar were chosen to portray Balakrishna’s parents, while the supporting cast included Kaikala Satyanarayana, Sangeeta, Radha Kumari, and Babu Mohan.

[8] Producer Venkatarama Reddy later decided to cast Malayalam actor Rajkumar after being impressed by his performance in the film Vietnam Colony (1992).

[8] Principal photography for Bhairava Dweepam commenced on 25 June 1993, with an opening ceremony held at Vijaya Vauhini Studios in Madras (now Chennai).

The event was attended by prominent figures, including Rajinikanth, who gave the ceremonial clap, Chiranjeevi, who switched on the camera, and N. T. Rama Rao, who provided honorary direction.

The team had to undertake a car ride followed by a Jeep journey and then trek 1 kilometre through water, crossing a bridge to reach the site.

[14] While this technique effectively depicted the required visuals, it posed risks of injury to the animals, including potential broken legs.

During the censor review, these scenes were highlighted, with the board clearing the film without cuts but cautioning that animal rights activists might raise concerns.

[6] The success of Bhairava Dweepam bolstered the confidence of the production team, inspiring them to collaborate again on a mythological film, Sri Krishnarjuna Vijayam (1996).

[15] K. Vijiyan of New Straits Times while reviewing the Tamil dubbed version Vijaya Prathapan praised Balakrishna's performance, the special effects and production design, calling it an "enjoyable 'raja-rani' film".

Director Venkatesh Maha credited Bhairava Dweepam with significantly influencing his childhood and career, commending its boldness and the unique emotional response it evoked in him.