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One non-definitive list online gives Pirates of the Caribbean: At World's End as the most expensive film. Avatar is #5 on that list. It is not always easy to know what production costs on movies are, given the secrecy of some projects.
Another more recent list puts Avatar on the top at $500 million. The preponderance of evidence seems to indicate that Avatar is in fact at the top of the list. One half of a billion dollars is quite a bit of money to put into a film project, although the results were spectacular.
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