The screenplay by Aeneas MacKenzie, John Huston, and Wolfgang Reinhardt is based on the 1934 biography The Phantom Crown by Bertita Harding and the 1925 play Juarez and Maximilian by Franz Werfel.

The film focuses on the ongoing conflict between Maximilian I (Brian Aherne), an Austrian archduke who is installed as the ruler of Mexico by the French Napoleon III (Claude Rains), and Benito Juárez (Paul Muni), the country's U.S.-backed president.

In 1863, Napoleon III of France, fearful he will lose Mexico to Juárez, circumvents the Monroe Doctrine by instituting sovereign rule and controlling an election that places Maximilian von Habsburg on the Mexican throne.

Upon his arrival in the country with his wife Carlota (Bette Davis), Maxmilian realizes he is expected to establish French supremacy by confiscating land that Juárez had returned to the native people and penalizing the rebels under his command.

When the American Civil War comes to an end, the United States warns Napoleon that it intends to enforce the Monroe Doctrine by military force if necessary, sending arms in support of Juárez's army.

[1] In 1937, Wallis and Jack L. Warner, in an effort to dissuade any other studios from embarking upon a similar project, purchased the screen rights to both the novel The Phantom Crown by Bertita Harding and the play Juarez and Maximilian by Franz Werfel, and on September 30 Aeneas MacKenzie began writing a first draft under associate producer Henry Blanke's supervision.

To ensure the film was as accurate as possible, Warners head of research Herman Lissauer acquired three hundred books on the subject, and two historians were hired to help with changes to the script.

Despite the fact the actor closely resembled his character, studio head Jack L. Warner was unhappy with the results and complained "You mean we're paying Muni all this dough and we can't even recognize him?"

Studio executives questioned his playing a relatively minor role in Juarez, but the actor was anxious to appear in it, so he remained in the cast, his box-office appeal managing to win out over his heavy Bronx accent.

He composed 3,000 bars of music for the score, at times emulating the rhythms of Frédéric Chopin and Franz Schubert, and the second theme of the first movement of his Violin Concerto was drawn from his work for the film.

What it has to say about the conflict between imperialist, benevolent despot and democrat has been expressed logically and eloquently, with reasonable fidelity to historic fact...But approval of a film's purpose and message cannot blind one altogether to some of the weaknesses of its structure.

"[4] In later years, Time Out London stated "Only Bette Davis and Gale Sondergaard have any fire in this otherwise plodding Warner Bros costume drama,"[5] while Channel 4 noted "Despite the frills, there is very little substance in this overcooked adventure.