Due to a heavy filming schedule, lots of filming was done while the entire crew was on the road. But because the bus was such a small set, there was no room for the crew. As such in many scenes, they are actually in shot, hiding under clothes and other props.
As of 2024, this is still the most recent contemporary-set film (i.e. non-period, non-fantasy, non-sci-fi) to win the Academy Award for Best Costume Design.
The town of Broken Hill is where the characters first encounter rural homophobia, and at the time, had that reputation in real life as well. After the popularity of this film, however, it established its own annual drag festival, including a parade that passes by the characters' hotel.
Bill Hunter was filming Muriel's Wedding (1994) and Priscilla at the same time, each requiring him to have different length hair, beard and to be in different parts of the country.
According to director Stephan Elliott, he got the idea for the film while seeing a plume of feathers break from a drag queen's headdress during Sydney's Mardi Gras parade and go tumbling down a deserted street like a tumbleweed in a Sergio Leone western.