While moored at a port in the South of France, Joan Wilder's (Kathleen Turner) and Jack Colton's (Michael Douglas) romance has grown stale. Joan, suffering writer's block, wants to return to New York, while Jack prefers aimlessly sailing the world on his boat, the Angelina. At a book signing engagement, Joan meets Omar (Spiros Focás), a charming Arab ruler who wants Joan to write his biography. Joan accepts and leaves with Omar over Jack's protests. Jack later runs into Ralph (Danny DeVito), the swindler from Jack and Joan's previous adventure in Colombia who demands Jack turn over the gem Jack and Joan found. Shortly after, an Arab, Tarak (Paul David Magid), informs Jack about Omar's true intentions and claims that Omar has the "Jewel of the Nile"; just as Tarak finishes his explanations, the Angelina mysteriously explodes. Ralph and Jack team up to find Joan and the fabled jewel.
Joan soon discovers that Omar is a brutal dictator rather than the enlightened ruler he claimed will unite the Arab world. In the palace jail, Joan encounters Al-Julhara (Avner Eisenberg), a holy man who is the "Jewel of the Nile" and whom Omar fears. The pair escape and find Jack, and they flee into the desert in Omar's hi-jacked F-16 fighter aircraft. Ralph is captured by Tarak's rebel Sufi tribe who are sworn to protect the Jewel so he can fulfill his people's destiny.
After encountering a Nubian mountain African tribe, Joan and Jack's romance is rekindled. Joan tells Jack that the jewel is Al-Julhara and not a gem stone. In Kadir, Omar intends to use a smoke-and-mirror-special effect provided by a British rock promoter to convince onlookers that he is the prophet who will unite the Arab world. Jack, Joan, and Al-Julhara arrive to expose Omar but are captured. Omar suspends Jack and Joan with ropes over a deep pit (a scenario taken from Joan's biggest-selling novel, The Savage Secret) while Al-Julhara is in a stockade; Ralph, along with the Sufi tribe, arrives in time to rescue the three prisoners.
As Omar takes center stage to address the Arab people, Jack and Joan disrupt the ceremony while the Sufi battle Omar's guards. A fire breaks out, engulfing Omar's stage. Jack and Joan are separated, and Omar corners Joan atop the burning scaffolding. Aided by Ralph using a giant crane, Jack reaches Joan in the nick of time and knocks Omar over the side and down into the flames, killing him. Al-Julhara rises and safely walks through the flames, fulfilling the prophecy that he is the true spiritual leader.
The following day, Jack and Joan are married by Al-Julhara. While Ralph is genuinely happy for Jack and Joan, he laments once again having gained nothing for his efforts, but Tarak acknowledges that he is a true Sufi friend and presents him with a jeweled dagger as Jack and Joan happily sail away down the Nile.
With a $21 million budget, principal photography began April 22, 1985 with filming wrapped on July 25, 1985. Location shooting took place at Villefranche-sur-Mer and the Palais des Festivals et des Congrès, Cannes, France and Meknes, Morocco, among other locations, including Zion National Park, Springdale, Utah.
At the time, both Kathleen Turner and Michael Douglas only made the sequel because they were contractually obligated to do so, although Douglas was much more invested in the film as its producer. At one point during pre-production, Turner who had negotiated script approval, tried to back out of the project, until 20th Century Fox threatened her with a $25 million lawsuit. Douglas intervened on her behalf and ensured that a rewrite was made. Turner, Douglas and DeVito would later reunite in the unrelated film The War of the Roses.
Filming in North Africa was dogged with problems from unbearable 120 degree F heat to problems with the local crew but the most troubling concern was that the director showed that he was not up to the task of helming an action film. After one massive night scene that was hours in setup, and cast and crew in place, it was only then that someone noticed that there was no film in the cameras. As producer, Michael Douglas exploded; the whole debacle had to be re-filmed another day, only after the raw film stock was finally located. More problems with local customs cropped up, with film and equipment mysteriously held up by customs until the requisite bribes were paid. In the end, being only three weeks behind schedule was a minor triumph for Douglas.
Approximately two weeks before principal photography began, an aircraft carrying Richard Dawking (production designer) and Brian Coates (production manager) crashed during location scouting over the countryside of Morocco, killing all on board. The film is dedicated to the memory of Dawking and Coates, as well as screenwriter Diane Thomas, who had died in an automobile accident. During filming in Morocco, Douglas and Turner flying in an executive jet aircraft, had a near-accident when their aircraft wing struck the runway in a heavy landing.
The use of a General Dynamics F-16 Fighting Falcon mock-up was a key element of the main characters escaping from a fortified town. The wooden, styrofoam and fibreglass mockup was built on an automobile chassis and powered by a 350ci Chevrolet engine.
As with the first film, the novelization of the sequel was credited to Joan Wilder, the character played by Kathleen Turner; both books were actually ghost written by Catherine Lanigan.
The Jewel of the Nile was the final film released on the RCA SelectaVision CED video format. It was also released in other media formats.
"When the Going Gets Tough, the Tough Get Going", performed by Billy Ocean, plays during the film's end credits. Douglas, Turner, and DeVito also co-starred with Ocean in the MTV music video of the same name. The soundtrack features 1980s rap group Whodini and their single "Freaks Come Out at Night" as Michael Douglas and company make their way through the desert on camel back as well as "Party (No Sheep Is Safe Tonight)" by The Willesden Dodgers during the campfire party scene.
Arista released a soundtrack album on record, cassette and compact disc.
While The Jewel of the Nile grossed more than its predecessor, the film was much less successful critically and effectively killed the franchise.
Critics felt the film was loaded with numerous plot holes and that it lacked the first film's original charm. The New York Times opened its review by writing, "There's nothing in The Jewel of the Nile that wasn't funnier or more fanciful in Romancing the Stone." Roger Ebert agreed that "... it is not quite the equal of Romancing the Stone," but praised the interplay between Douglas and Turner. "It seems clear," he wrote, "that they like each other and are having fun during the parade of ludicrous situations in the movie, and their chemistry is sometimes more entertaining than the contrivances of the plot."
Talk of another film in the romance/adventure series again featuring Douglas, Turner and De Vito reprising their roles never got beyond a draft. In The Crimson Eagle Jack Colton and Joan Wilder take their two teenage kids to Thailand where they are blackmailed into stealing a priceless statue. The project languished until 1997, when Douglas as the tentative producer of the film, announced he was no longer interested.