Vince Holloway (Dylan McDermott), a down-on-his-luck bounty hunter, is blackmailed by IRS agents Carl Strick (Dean Stockwell) and Vera Quinn (Tovah Feldshuh) into traveling to Diablo, a crime-ridden Mexican tax haven, to stop an illegal transfer of $20 million. Now he must work against crime lord Reno (James Russo) and money-laundering banker Cora (Jessica Harper). He is helped by Reno's ex Dakota (Pamela Gidley) and a fifteen-year-old hustler (Yano Anaya).
The Blue Iguana contains examples of:
- Animated Credits Opening: The opening credits play over cartoons of skeletons, coffins, crosses, and a blue iguana that crawls across the screen at one point.
- Blackmail: Five of Vince's bounties have died in the last two years. Vince insists he killed them all in self-defense, but the IRS agents say they could have him sent to jail for years if he doesn't help them.
- Chase-Scene Obstacle Course: During the opening chase scene, Louie Sparks knocks over trash cans to delay Vince.
- Given Name Reveal: The boy's name isn't revealed until the last few minutes of the movie, when he and Vince are brainstorming names for their establishment:Boy: We'll call it Yano's Hut.
Vince: Yano? What's a Yano?
Boy: That's my name, man!
Vince: Oh, sorry. - I Call It "Vera": The owner of a hotel named his gun "The Management" so he can say, "If you don't like it, talk to the management!" while threatening dissatisfied customers.
- If I Can't Have You…: While Vince and the boy are driving into town, they pass one body hanging from a tree and another draped over a fence. Vince later learned that those are men Dakota dated after leaving Reno, who killed them so that no one can have the woman he couldn't have.
- Percussive Maintenance: When the IRS agents' car conks out in the jungle, Carl tries to fix it by beating first the engine, then the hood, until Vera yells, "That's obviously not going to work!"
- Second-Face Smoke: When Floyd (Flea) sexually harasses Dakota at the bar, Dakota blows smoke in his face.
- Staircase Tumble: Carl once fell headfirst down some stairs while he was working with Vince. Now he has to wear a neck brace. Carl has hated Vince ever since, even though Vince insists it wasn't his fault.
- A Taste of the Lash: Floyd has a man tied up and whipped in front of the bank.
- "Wanted!" Poster: The movie opens with Vince receiving a phone call about bail-jumping kidnapper Louie Sparks. As he answers it, the camera pans over a poster offering a $5000 reward for Sparks' capture.
- Wretched Hive: As Vince and the boy drive into Diablo, they pass several dead bodies, two men doing a Super Window Jump while fighting, a burning car, a man being shot and then robbed, and a man being beaten while lying down.
