John Sayles had written the screenplay for this film before writing the screenplay for his debut film, Return of the Secaucus Seven (1980). Sayles failed to get funding for a film about a lesbian love affair in the 1970s, and those who felt comfortable with the material were not comfortable with the film being directed by a man. So, Sayles put the Lianna (1983) screenplay on hold until gaining success with his two first films, Return of the Secaucus Seven (1980) and Baby It's You (1983).
The money for the film was raised by producers Maggie Renzi and Jeffrey Nelson. The film's investors included about thirty "nontraditional" investors, people who had never put money into a film before.
This was filmed in 16mm and was later blown up to 35mm. This was common for independent films of the 1980s. The film was originally meant to be shot on 35mm with a budget of $800,000. Sayles could not raise the funds for this budget, and so they "cut corners" by shooting on 16mm.