This film is set years after the first two. The film begins with the scene of a woman going into labour in a cab. It is raining at night and the cab driver in panic runs out to get a police officer to help. As the officer goes to deliver the baby he asks the driver to call for an ambulance from a public phone. When the driver comes back, he sees the mutant baby killing the officer and the mother. Next, the film jumps to the scene inside a church where the corpse of the dead mutant baby is found.
From here on the main plot of the film gradually builds up. First, the courtroom drama where Judge Watson (Macdonald Carey) decides that Jarvis' mutant baby and four other mutant babies who are under the government custody must be quarantined in some remote deserted island. Second, scenes of how Jarvis (Michael Moriarty) faces his life after the courtroom drama. Third, the incursion to the island of the mutant babies by the pharmaceutical company's boss, Cabot (William Watson). Cabot and a few of his people plan to kill the babies so that his company can manufacture again the drug which resulted in these mutant babies, but under a different label.
In the end, all of them are killed and eaten by the mutant babies who have grown bigger while the helicopter pilot is killed on board the helicopter when he tries to escape and the helicopter explodes in mid-air crashing into the sea. Fourth, Lieutenant Perkins (James Dixon) informs Jarvis personally that they have been recruited by Dr. Swenson (Art Lund) to join him and his team in an expedition to the mutant babies' island. The expedition ends in disaster with only Perkins and Jarvis being left alive. Finally, Perkins is left alone on the island while Jarvis, his mutant son, the other grown mutants and a new infant mutant leave the island in the sailing ship which brought Jarvis to the island for Florida. In Cape Vale, Florida, Jarvis' mutant son gets to meet his mother, Ellen (Karen Black) with his female mate. They leave their infant child with her before they die from measles.
Larry Cohen later said the film began when he went to Warner Bros with Andre De Toth and pitched them the idea of remaking House of Wax (1953). Warner was not interested. However the studio wanted Cohen to make a film for their video division. Cohen was only willing to do this if Warner would pay for two films, to be shot back-to-back. Warner agreed. The two films were sequels to It's Alive and Salem's Lot; both had built-in name recognition ideal for the straight-to-video market.
It was Cohen's third It's Alive film.
I thought if I was going to make a third movie, I had to follow this story through to some kind of new and satisfying resolution. So, I asked myself some questions: what are these babies like as adults? What is the monster going to look like when it physically develops and ages? I thought those were important questions to answer and deal with. Otherwise, there was no point in making the movie if I was just going to have a load of monster babies running around again, killing people. The second film was, to a degree, different from the first because the protagonists were trying to save the monsters. In the third film, we got all of the monster birth stuff out of the way in the prologue and gave the audience their horror. The rest of the movie was more of an exploration of Jarvis’ character and the progress of the monster children. I thought that differentiation from the events of the previous pictures made Island of the Alive a worthwhile project.
Cohen says the theme of the film were encapsulated in one of the opening scenes, where Michael Moriarty's character argues for his son's existence. Cohen:
That scene was really what this film was about: whether or not society was going to permit these creatures to live or if it would destroy them. Such an important question would have to be decided by a jury’s prudence and so the idea of beginning our story with a courtroom trial made perfect sense to me. I liked the idea of commencing the film with a direct moral question. I thought it was a legitimate and challenging opening as the monsters’ very existence was at stake. The monsters are eventually removed from society and quarantined on an island where they will come of age in isolation. In that regard, Island of the Alive is different from It’s Alive and It Lives Again, as I wanted to try something that had a contrasting tone and thrust to the whole story. You’ll no doubt notice that there is much more humour in the third film than in the previous two pictures.
The film was filmed on location in Kaui, Hawaii.
James Dixon reprises his role as Lieutenant Perkins from the previous two films in this It's Alive film series. His character is the only one that appears in all three films. Others, like Frank Davis and Eugene Scott, were just mentioned in the film.
It was Larry Cohen's third film with Michael Moriarty. The director deliberately encouraged his star to play the role in an eccentric manner. Cohen:
I always like to make use of Moriarty’s bravery and his willingness to give a way-out, individualistic performance. Your average actor will just give you a straightdown-the-line performance, but Moriarty takes big chances. You’ll find that when you are adventurous as an actor and take big chances, you often get good results... Moriarty is not the kind of actor who needs to dress up to inhabit a character. He has such great instincts and abilities, it just all comes out. I thought the character of Jarvis in Island of the Alive and Moriarty’s performance was terrific. He had a controlled insanity about him, but that character is not without humanity and courage. The way Jarvis comes out and makes fun of himself, and everybody else around him, makes the entire situation seem insane. Obviously, in reality, it would be an insane situation if you and your wife had given birth to this monster child.
The film was released on home video on 31 August 1994.