The American Library Association designated the book a "Best of the Best Books for Young Adults". The School Library Journal included the book in its list of the 100 most influential books of the 20th century. It was selected to the 1982 Booklist Reviewer's Choice, the 1982 American Library Association Best Books, and the ALA Best of the Best lists (1970–1983). The Young Adult Library Services Association, a division of the American Library Association, gave Nancy Garden its Margaret A. Edwards Award for Lifetime Achievement for Annie on My Mind in 2003.
The book is number forty-eight on the top 100 most frequently challenged books during the period 1990 to 2000, according to the American Library Association. It ranked No. 44 on the ALA's 1990 to 1999 list.
In 1993, the LGBT organization Project 21 donated Annie on My Mind, along with Frank Mosca's All-American Boys, to forty-two high schools in the Kansas City area.
Because both books included homosexual themes, some parents objected that the books were made available to high school students.
During the controversy, copies of the book were burned.
Around the time the incident happened, author Nancy Garden was at a writers' conference. When asked if she had had trouble with Annie on My Mind she said no. Soon after, she learned of the burning when she received a call from Stephen Friedman, who asked, "Did you know your book has just been burned in Kansas City?" 
Garden commented on the incident,
|“||Burned! I didn't think people burned books any more. Only Nazis burn books.||”|
On December 13, 1993, superintendent Ron Wimmer, of the Olathe School District, ordered the book removed from the high school library. Wimmer said he made his decision in order to "avoid controversy", such as the public book burning.
The Olathe School District refused to accept copies of the book, removing a copy that had sat on its shelf for over ten years. In response, the American Civil Liberties Union joined several families and a teacher and sued the school district for removing the book.
Two years later in September 1995, the case went to trial. In November 1995, U.S. District Court justice Thomas Van Bebber ruled that while a school district is not obligated to purchase any book, it cannot remove a book from library shelves unless that book is deemed educationally unsuitable. He ruled Annie on My Mind to be educationally suitable, and called its removal an unconstitutional attempt to "prescribe what shall be orthodox in politics, nationalism, religion, or other matters of opinion".
On December 29, 1999, the school district announced it would not appeal the court's decision, and restored Annie on My Mind to library shelves. The entire proceeding had cost the district over $160,000.
After the banning controversy, author Nancy Garden became a spokesperson on behalf of children's intellectual freedom as readers. This earned her Robert B. Downs Intellectual Freedom Award in 2000.