In some ways My Blue Heaven is a preemptive sequel to Goodfellas, as Goodfellas ends with Hill's dissatisfaction with life in the Witness Protection Program, while My Blue Heaven starts out Hill's life after the move. Goodfellas stays much closer to the facts of Hill's life, but a lot of Hill's experiences are reflected in the latter film (in an addition, My Blue Heaven flashes title cards on the screen listing the chapter headings in Hill's books).
While Goodfellas was based upon the book Wiseguy by Nicholas Pileggi, the screenplay for My Blue Heaven was written by Pileggi's wife, Nora Ephron, and much of the research for both works was done in the same sessions with Hill.
The movie was filmed primarily in the California city of San Luis Obispo and the surrounding area, though the nominal setting is a fictional suburb of San Diego, California. Some scenes were actually shot in San Diego.