Originally based on the upstate New York urban legend of the Cropsey maniac, the film was conceived by Giannone and producer Gary Sales, both first-time feature filmmakers who had met in college.

Their initial premise and main antagonist was changed last-minute due to conflicts with The Burning (1981), which featured the Cropsey villain and was in production at the same time.

Madman was given a regional platform release by Jensen Farley Pictures, opening in Albuquerque, New Mexico on October 30, 1981, and screening throughout the United States over the following two years.

Marz impales Betsy on a coat rack, but she manages to wound him with a hunting knife before dying, causing him to knock over a candle and start a fire.

[6] The two devised the working title Madman: The Legend Lives, with Giannone writing the screenplay, while Sales attempted to find an investor to help fund the production.

[7] By 1980, Giannone and Sales had secured enough financing to enter production; it was during this time that the filmmakers became aware of Harvey Weinstein’s The Burning (1981), also featuring the Cropsey maniac.

[9][10] The idea of Cropsey was changed to the fictionalized "Madman Marz," a farmer who had massacred his family and lynched by an angry mob, whose presence is claimed to still haunt the woods near his home.

[12] Paul Ehlers, originally an artist designing promotional materials for the film, was offered the role of the villain, Madman Marz, by Giannone.

[citation needed] For the role of Max, the middle-aged head counsellor, Giannone and Sales had originally wanted to approach screen legend Vincent Price, but with the movie being non-union, they felt that the actor would decline the offer.

Gaylen Ross, who had previously starred in the zombie epic Dawn of the Dead (1978), was cast as the lead heroine, Betsy, and credited under the name Alexis Dubin.

According to Ross, because the film was a non-union production, the cast and crew were credited with pseudonyms to avoid breaching their membership with the Screen Actors Guild.

[15] According to actress Gaylen Ross, as the leaves were starting to turn brown and fall from the trees, the production were forced to find as many as possible and paint them green to give the impression that the film was set in summer.

[13] However, Frederik Neumann's character Max states early in the film, around the campfire, that there is only "one weekend left before Thanksgiving" and his "winter vacation down South", so it must be assumed then that the action does take place in a cold November night and not during Summertime.

[citation needed] The special effects in the film were created with practical methods, some of which were dubious and demanded the scenes being filmed quickly: The opening scene, which sees Max tells the story of Madman Marz around a campfire, actor Tony Fish was given only one night to memorize the song that he sings in an effort to creep out his fellow counsellors, as the prosthetics for Madman Marz were late arriving on set, and the director was forced to rethink his shooting schedule.

[citation needed] Other practical effects included dummy heads made of condoms with fake blood, which, when hit with an axe, created the image of a skull being crushed.

[4] Linda Gross, of the Los Angeles Times, deemed the screenplay "predictable" and the film "another truly terrible and ludicrous horror movie about a crazy ax murderer lurking around a camp for gifted children.

"[29] Robert Firsching of AllMovie called it an "unremarkable slasher film", writing "only genre completists with completely undiscriminating tastes are likely to be frightened or entertained".

[37] New York deathgrind band Mortician used a soundbyte from one of the film's trailers for the song "Madman Marz" on their 2004 album Re-Animated Dead Flesh.