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Intended by writer /producer / director Kim Henkel to be the "real" sequel to The Texas Chain Saw Massacre (1974). The characters of Vilmer and W.E. were intended to be the Hitchhiker and Cook. Jim Siedow, who played Drayton Sawyer, was offered the role of the grandfather, but he turned it down.
The film has been noted for its implementation of a secret society subplot driving Leatherface's family to terrorize civilians in order to provoke them to a level of transcendence; in a retrospective interview, Kim Henkel confirmed that the basis of the subplot was influenced by theories surrounding the Illuminati. Other references to the Illuminati are made in the film's dialogue, specifically in the scene in which Darla tells Jenny about the thousands-years-old secret society in control of the U.S. government, and makes reference to the Kennedy assassination.
The hospital scene at the end featured three actors from The Texas Chain Saw Massacre (1974). John Dugan, who played Grandfather is the cop, Paul A. Partain, who played Franklin Hardesty, is the orderly, and Marilyn Burns, who played Sally Hardesty, is the patient on the gurney (credited as "Anonymous").
After a protracted post-production, the film had its world premiere, under the title The Return of the Texas Chainsaw Massacre, at the South by Southwest Film and Media Conference on March 12, 1995, and received "glowing reviews" at the time. The film was purchased by Columbia Pictures for $1.3 million. The studio agreed to distribute the film theatrically (along with its home-video release), and agreed to spend no less than $500,000 on prints and advertising. The film was released theatrically on September 22, 1995, and was screened in 27 theaters in the United States, grossing $44,272. Later in 1995, the film was released theatrically and on LaserDisc in Japan, and then was shelved for the following two years, when in 1997, Columbia re-edited, re-titled, and re-released it as Texas Chainsaw Massacre: The Next Generation.
Matthew McConaughey (Vilmer) and Renée Zellweger (Jenny) came to fame two years later, with A Time to Kill (1996) and Jerry Maguire (1996), respectively. Both shared the same talent agency. When Sony, which owned this movie's distribution rights, was preparing to re-release it highlighting the pair, their agent threatened a lawsuit against the studio, claiming their clients were being unfairly exploited. The agency also said that if Sony released this movie on the backs of their names, neither would appear in any future Sony releases.
The film was released theatrically in a limited release in approximately twenty U.S. cities on August 29, 1997 under a co-distribution deal between Columbia Pictures and Cinépix Film Properties. The theatrical release featured the re-cut version of the film, which excised a total of seven minutes from Henkel's original cut. The film earned $53,111 on 23 screens between August 29 and September 1, 1997. It would go on to gross a total of $185,898 domestically (including both the 1995 and 1997 versions), making it the poorest-performing Texas Chainsaw Massacre film.
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