Frank Rich of New York Times wrote, "only a writer of real talent can write an angry play that remains funny and controlled even in its most savage moments. Sister Mary Ignatius Explains It All For You confirms that Christopher Durang is just such a writer". Lynn Trenning of Art Savant wrote that "the script is brilliant in its grasp of the ironic inconsistencies between Catholic doctrine and practical reality" while noting in her review of the original off Broadway production by the Off-Tryon Theatre Company that the lead's "too gentle demeanor failed to convince me she was the Sister Mary Ignatius who terrified children into obedience".
The play's stark criticism of Catholicism eventually led to controversy. Some conservative Catholics were offended by the play's stereotyping, and in St. Louis and Boston, major protests against the play occurred. Attempts were made to keep the play from being produced, though they were unsuccessful in stopping it in St. Louis or Boston. In St. Louis, two state senators attempted to pass a law penalizing theatres that did not promise not to present plays people might find offensive, but after much publicity, the bill failed in committee.
Phil Donahue devoted a full episode of his national talk show to the controversy, focused on efforts to close the play in St. Louis. Video clips of the Los Angeles production were shown during the program, and box office increased greatly in New York and Los Angeles after the program.