Although L.M. Montgomery based her Anne novels on Prince Edward iIsland, less than 5% of the Sullivan film was shot in P.E.I.
Most of the scenes were filmed in Ontario. The sets were constructed to replicate the style architecture typical to the island during
the Victorian era. Only the scenes of the ocean and and red roads were actually filmed on P.E.I.
Sullivan Entertainment decided to film most of the movie in Ontario, as it was less expensive and because so many P.E.I.'s buildings no longer had the 'proper' Victorian look.
Although Prince Edward Island today advertises a carriage ride through an orchard, called "The White Way of Delight", the "White Way", which Anne and Matthew drive through in the movie was actually filmed near Toronto.
The Green Gables house from the Anne films was actually two distinct buildings: One building was filmed from a distance, because it included a beautiful backdrop of rolling hills and countryside, and the other building was Butternut Farm, outside of Toronto, and was used for close up filming.

Most of the film was shot in southern Ontario, and many scenes were set within an hour of the Toronto-based studio. Compared to the locations of the first two films, many of the locations had changed as the city expanded, and it was difficult to duplicate the sounds and 'feel' of the past installments.