A Handful of Dust first appeared in Harper's Bazaar, as a serial in five instalments during the summer of 1934, using the alternative, non-Brazilian ending. The complete novel was first published in book form in London, on 4 September 1934, by Chapman and Hall. It was an immediate success with the British public, and within four weeks had reached its fifth impression. In the same month it was issued in New York by Farrar & Rinehart, who were initially unenthusiastic about the book and, according to Waugh's agent, made little promotional effort on its behalf. It has since been published in the United States by (among others) New Directions (1945), Dell Publishing (1959) and Little, Brown (1977).
Since its first publication the book has remained in print, and has been reproduced in many editions and foreign languages. It was first published as a paperback in 1951, by Penguin, who have reissued it regularly. In 1945 Bernard Grasset published a translation in French, after which the book was published in most European languages, and also in Chinese, Japanese, Korean and Arabic.
The initial critical response to the book, while largely complimentary in tone, was nevertheless muted and sparse. This relative paucity of attention, Stannard surmises, might have been a consequence of the earlier serialisation, which meant that the essence of the story was well known before the book appeared. The Times Literary Supplement's anonymous reviewer deemed the novel "a study of futility", whose hero is "so incapable of helping himself that he is not worth helping". Peter Quennell in the New Statesman found the story both painful and amusing—"tragedy and comedy are interdependent"—but was not overcome by the bouts of hilarity that had interrupted his reading of earlier novels such as Decline and Fall. If not exhilarating, the book was "certainly the most mature and best written novel that Mr Waugh has yet produced". Plomer's Spectator review described the book as "another of [Waugh's] cultivated pearls", economically written, holding the reader's attention throughout and capturing with precision the moods and rhythms of life as it was lived in certain quarters of society.
The only overtly hostile review was Oldmeadow's in The Tablet, which asserted that, after the disquiet in Catholic circles following the publication of Waugh's previous novel, his co-religionists "reasonably hoped to find Mr Waugh turning over a completely new leaf. He has not done so". The review mixed literary criticism with moral sermonising, to which Waugh felt bound to object publicly. His friend, the journalist Tom Driberg agreed to place a notice in his "William Hickey" column in the Daily Express, in which Waugh accepted fully Oldmeadow's right to criticise the literary quality of the work "in any terms he thinks suitable". However, he added, so far as his moral lecturing was concerned, Oldmeadow was "in the position of a valet masquerading in his master's clothes. Long employment by a prince of the Church has tempted him to ape his superiors, and, naturally enough, he gives an uncouth and impudent performance".
Many of Waugh's friends and admirers gave the book unstinting praise, among them Rebecca West, Diana Cooper, Desmond MacCarthy and Hilaire Belloc. Among those less enthusiastic were the novelist J.B. Priestley, who found the characters lightweight and uninvolving, and the devoutly Catholic Katharine Asquith who thought the writing was brilliant but the subject-matter deeply depressing. The novel's critical standing grew steadily in the years following its publication. In 1942 the American critic Alexander Woollcott chose it as the best English novel in 100 years, a verdict largely endorsed some years later by Frank Kermode. Sykes wrote in 1975 that "there are only five or six novels of this century that can seriously challenge it".
In 2010 Time magazine placed A Handful of Dust at 41st in its listing of the hundred best English-language novels published since 1923 (the year the magazine began publication), stating: "If this is Waugh at his bleakest it’s also Waugh at his deepest, most poisonously funny". In the Modern Library's list of 100 best novels, A Handful of Dust is placed 34th in the "Board list", although unplaced in the complementary "Readers' List".