Revealing mistake: Near the end, Dundee captures Rico (the bad guy) and changes clothes with him. Dundee is at least 6 inches taller than Rico, yet the traded clothes fit both men perfectly.
Character mistake: When Mick arrives at walkabout hotel, Nugget introduces himself to Mick as if they have never met before. Yet in the first movie, Nugget is asking how Mick is getting on in New York. It may be just a case of over familiarity by Nugget but it doesn't make a lot of sense.
Factual error: The sequence showing the moon is incorrect as it shows the Moon as it looks from the northern hemisphere. It should be inverted.
Continuity mistake: When in the apartment with the NYPD Officer, the door is open in the background. When the two DEA Agents arrive, they have to open the door.
Continuity mistake: Near the end of the film Mick Dundee changes clothes with a Columbian drug dealer to lure his accomplice out. The film then shows his old friend taking aim at what he believes is the Columbian, he aims his rifle as you see Mick and the Columbian walking right to left. Mick's friend shoots, hitting his target on the left side. When you next see Mick a few seconds later his right arm is wounded.
Continuity mistake: After rescuing Walter in the water, they both get out and they're soaked. When Walter enters the camp, his clothes and his hat are 100% completely dry. There is no way he could've been dried off completely that fast.