Shot on location in Budapest, Hungary. The opera house is actually the József Katona Theatre in Kecskemét. The Phantom's lair was shot in storage facilities underneath a brewery.
As with most versions, the above version bears little resemblance to the Gaston Leroux novel.
Maximillan Schell was known for "chewing the scenery" on occasion, regarding his performances. He did the same thing in "Phantom of the Opera."