The film was an international co-production between West German, French, and Italian companies, led by Artur Brauner's CCC Filmkunst.

The film's plot has Sherlock Holmes and Dr. Watson attempting to recover a stolen necklace, formerly worn by Cleopatra, from Professor Moriarty.

One-time Universal screenwriter Curt Siodmak (The Wolf Man) wrote the screenplay, based on the characters created by Sir Arthur Conan Doyle.

Director Terence Fisher wrote memos to Brauner complaining the film was too static and not cinematic enough, leading to many rewrites by various uncredited screenwriters.

In the German-language version, Lee was dubbed by Harry Wüstenhagen, who was the German voice of Holmes in several other productions including A Study in Terror (John Neville) and The Seven-Per-Cent Solution (Nicol Williamson).

"[4] Segnalazione Cinematografiche criticised the film for reducing the tale to banalities and for being a sloppy adaption with modest performances by director and actors.

[9] However, the German Lexikon des internationalen Films called it "an amusing detective game" set at the turn of the century that came quite close to recreating "the strange attraction" of Conan Doyle's Holmes adventures.

[12] Charles Prepolec of the Holmes fan website BakerStreetDozen.com wrote, "There are some amusingly broad characters that add an element of humour, including a sadly Nigel Bruce-like performance from Thorley Walters.

In 2006, Alpha Video released a double feature DVD including Sherlock Holmes and the Deadly Necklace and the 1931 film The Speckled Band, starring Raymond Massey.