There are differing accounts as to how Caligari was first received by audiences and critics immediately after its release. Stephen Brockmann, Anton Kaes and film theorist Kristin Thompson say it was popular with both the general public and well-respected by critics. Robinson wrote, "The German critics, almost without exception, ranged from favourable to ecstatic". Kracauer said critics were "unanimous in praising Caligari as the first work of art on the screen", but also said it was "too high-brow to become popular in Germany". Barlow said it was often the subject of critical disapproval, which he believes is because early film reviewers attempted to assign fixed definitions to the young art of cinema, and thus had trouble accepting the bizarre and unusual elements of Caligari. Some critics felt it imitated a stage production too closely. Other commentators, like critic Herbert Jhering and novelist Blaise Cendrars, objected to the presentation of the story as a madman's delusion because they felt it belittled Expressionism as an artform. Theater critic Helmut Grosse condemned the film's visual design as clichéd and derivative, calling it a "cartoon and (a) reproduction of designs rather than from what actually took place on stage". Several reviewers, like Kurt Tucholsky and Blaise Cendrars, criticized the use of real actors in front of artificially-painted sets, saying it created an inconsistent level of stylization. Critic Herbert Ihering echoed this point in a 1920 review: "If actors are acting without energy and are playing within landscapes and rooms which are formally 'excessive', the continuity of the principle is missing".
While Robinson said the response from American critics was largely positive and enthusiastic, Kaes said American critics and audiences were divided: some praised its artistic value and others, particularly those distrustful of Germany following World War I, wished to ban it altogether. Some in the Hollywood film industry felt threatened by the potential rivalry and spoke out against Caligari's release, condemning it as a "foreign invasion". Nevertheless, the film remained popular in the United States. Several American reviewers compared it to an Edgar Allan Poe story, including a 1921 review in Variety magazine, which praised the direction and "perfect tempo" of the film, as well as the sets that "squeeze and turn and adjust the eye, and through the eye the mentality". A New York Times review likened it to modernist art, comparing the film's sets to Marcel Duchamp's Nude Descending a Staircase, No. 2, and said the film "gives dimensions and meaning to shape, making it an active part of the story, instead of merely the conventional and inert background", which was key to the film's "importance as a work of cinematography". Albert Lewin, a critic who eventually became a film director and screenwriter, called Caligari "the only serious picture, exhibited in America so far, that in anything like the same degree has the authentic thrills and shock of art". A story in a November 1921 edition of Exceptional Photoplays, an independent publication issued by the National Board of Review of Motion Pictures, said it "occupies the position of unique artistic merit", and said American films in comparison looked like they were made for "a group of defective adults at the nine-year-old level".
Caligari was a critical success in France, but French filmmakers were divided in their opinions after its release. Abel Gance called it "superb" and wrote, "What a lesson to all directors!" and René Clair said "overthrew the realist dogma" of filmmaking. Film critic and director Louis Delluc said the film has a compelling rhythm: "At first slow, deliberately laborious, it attempts to irritate. Then when the zigzag motifs of the fairground start turning, the pace leaps forward, agitato, accelerando, and only leaves off at the word 'End', as abruptly as a slap in the face." Jean Epstein, however, called it "a prize example of the abuse of décor in the cinema" and said it "represents a grave sickness of cinema". Likewise, Jean Cocteau called it "the first step towards a grave error which consists of flat photographic of eccentric decors, instead of obtaining surprised by means of the camera". French critic Frédéric-Philippe Amiguet wrote of the film: "It has the odor of tainted food. It leaves a taste of cinders in the mouth." The Russian director Sergei Eisenstein especially disliked Caligari, calling it a "combination of silent hysteria, particoloured canvases, daubed flats, painted faces, and the unnatural broken gestures and action of monstrous chimaeras".
While early reviews were more divided, modern film critics and historians have largely praised Caligari as a revolutionary film. Film reviewer Roger Ebert called it arguably "the first true horror film", and critic Danny Peary called it cinema's first cult film and a precursor for arthouse films. In October 1958, Caligari was selected as one of the 12 best films of all time during a poll organized at the Brussels World’s Fair. With input from 117 film critics, filmmakers and historians from around the world, it was the first universal film poll in history. American film historian Lewis Jacobs said "its stylized rendition, brooding quality, lack of explanation, and distorted settings were new to the film world". Film historian and critic Paul Rotha wrote of it, "For the first time in the history of the cinema, the director has worked through the camera and broken with realism on the screen; that a film could be effective dramatically when not photographic and finally, of the greatest possible importance, that the mind of the audience was brought into play psychologically". Likewise, Arthur Knight wrote in Rogue: "More than any other film, (Caligari) convinced artists, critics and audiences that the movie was a medium for artistic expression". Caligari ranked 12th in a poll of the greatest films of all time organized at the Exposition Universelle et Internationale in Brussels in 1958, in which 120 international film critics participated. Entertainment Weekly included Caligari in their 1994 "Guide to the Greatest Movies Ever Made", calling it a "landmark silent film" and saying, "No other film's art direction has ever come up with so original a visualization of dementia". It holds a rare 100% rating on Rotten Tomatoes based on 48 reviews.
Caligari is considered the quintessential work of German Expressionist cinema, and by far the most famous and well-regarded example of it. It is considered a classic film, often shown in introductory film courses, film societies and museums, and is one of the most famous German films from the silent era. Film scholar Lewis Jacobs called it "most widely-discussed film of the time". Caligari helped draw worldwide attention to the artistic merit of German cinema, while also bringing legitimacy to the cinema among literary intellectuals within Germany itself. Lotte Eisner has said it was in Expressionism, as epitomized in Caligari, that "the German cinema found its true nature." The term "caligarism" was coined as a result, referring to a style of similar films that focus on such themes as bizarre madness and obsession, particularly through the use of visual distortion. Expressionism was late in coming to cinema, and by the time Caligari was released, many German critics felt the art form had become commercialized and trivialized; such well-known writers as Kasimir Edschmid, René Schickele, and Yvan Goll had already pronounced the Expressionist movement dead by the time Caligari arrived in theaters. Few other purely Expressionistic films were produced, and Caligari was the only one readily accessible for several decades. Among the few films to fully embrace the Expressionist style were Genuine (1920) and Raskolnikow (1923), both directed by Wiene, as well as From Morn to Midnight (1920), Torgus (1921), Das Haus zum Mond (1921), Haus ohne Tür und ohne Fenster (1921) and Waxworks.
While few other purely Expressionistic films were made, Caligari still had a major influence over other German directors, and many of the film's Expressionist elements – particularly the use of setting, lighting shadow and shadow to represent the dark psychology of its characters – became prevalent in German cinema. Among the films to use these elements were Murnau's Nosferatu (1922) and The Last Laugh (1924), G. W. Pabst's Secrets of a Soul (1926), and Lang's Metropolis (1927) and M (1931). The success of Caligari also effected the way in which German films were produced during the 1920s. For example, the majority of major German films over the next few years moved away from location shooting and were fully filmed in studios, which assigned much more importance to designers in German cinema. Robinson argues this led to the rise of a large amount of film designers – such as Hans Dreier, Rochus Gliese, Albin Grau, Otto Hunte, Alfred Junge, Erich Kettelhut and Paul Leni – and that impact was felt abroad as many of these talents later emigrated from Germany with the rise of the Nazi Party. Additionally, the success of Caligari's collaborative effort – including its director, set designers and actors – influenced subsequent film production in Germany for many years, making teamwork a hallmark of German cinema in the Weimar Republic.
The impact of Caligari was felt not just in German cinema, but internationally as well. Both Rotha and film historian William K. Everson wrote that the film probably had as much of a long-term effect on Hollywood directors as Battleship Potemkin (1925). In his book The Film Til Now, Rotha wrote that Caligari and Potemkin were the "two most momentous advances in the development of the cinema", and said Caligari "served to attract to the cinema audience many people who had hitherto regarded the film as the low watermark of intelligence". Caligari had an impact on the style and content of Hollywood films in the 1920s and early 1930s, particularly in such as The Bells (1926), The Man Who Laughs (1928) and Murders in the Rue Morgue (1932), and had a major influence on American horror films of the 1930s, some of which featured an antagonist using Caligari-like supernatural abilities to control others, such as Dracula (1931), Svengali (1931) and The Mad Genius (1931). Kaes said both Caligari's stylistic elements, and the Cesare character in particular, influenced the Universal Studios horror films of the 1930s, which often prominently featured some sort of monster, such as Frankenstein (1931), The Mummy (1932), The Black Cat (1934), Bride of Frankenstein (1935). The Expressionism of Caligari also influenced American avant-garde film, particularly those that used fantastic settings to illustrate an inhuman environment overpowering an individual. Early examples include The Fall of the House of Usher (1928), The Last Moment (1928) and The Life and Death of 9413: a Hollywood Extra (1928). LoBrutto wrote, "Few films throughout motion picture history have had more influence on the avant-garde, art, and student cinema than Caligari".
Caligari and German Expressionism heavily influenced the American film noir period of the 1940s and 50s, both in visual style and narrative tone. Noir films tended to portray everyone, even the innocent, as the object of suspicion, a common thread in Caligari. The genre also employs several Expressionistic elements in its dark and shadowy visual style, stylized and abstract photography, distorted and expressive make-up and acting. Caligari also influenced films produced under the Soviet Union, such as Aelita (1924), and The Overcoat. Observers have noted the black and white films of Ingmar Bergman bear a resemblance to the German films of the 1920s, and film historian Roy Armes has called him as "the true heir of Caligari". Bergman himself, however, has downplayed the influence of German Expressionism on his work. Caligari has also had an impact on stage theater. Siegfried Kracauer wrote that the film's use of the iris-in has been mimicked in theatrical productions, with lighting used to single out a lone actor.
Caligari continues to be one of the most discussed and debated films from the Weimar Republic. Two major books have played a large part in shaping the perception of the film and its impact on cinema as a whole: Siegfried Kracauer's From Caligari to Hitler (1947) and Lotte Eisner's The Haunted Screen (1974). From Caligari to Hitler based its claims about the film largely on an unpublished typescript by Hans Janowitz called Caligari: The Story of a Famous Story, which gave Janowitz's and Carl Mayer principal credit for the making of Caligari. Mike Budd wrote of Kracauer's book: "Perhaps no film or period has been so thoroughly understood through a particular interpretation as has Caligari, and Weimer cinema generally, through Kracauer's social-psychological approach". Prior to the publication of From Caligari to Hitler, few critics had derived any symbolic political meaning from the film, but Kracauer’s argument that it symbolized German obedience toward authority and a premonition of the rise of Adolf Hitler (See the Themes section for more) drastically changed attitudes about Caligari. Many of his interpretations of the film are still embraced, even by those who have strongly disagreed with his general premise, and even as certain claims Kracauer made have been disproven, such as his statement that the original script included no frame story. (See Writing for more.) Eisner's book placed Caligari into a historical context by identifying how it influenced Expressionist features in other 1920s films.
Film historian David Robinson claimed Wiene, despite being the director of Caligari, is often given the least amount of credit for its production. He believes this is in part because Wiene died in 1938, closer to the release of the film than any other major collaborators, and was therefore unable to defend his involvement in the work while others took credit. In fact, Robinson argues Caligari ultimately hurt Wiene's reputation because his subsequent films did not match its success, so he is often wrongly considered "a one-film director who had a lucky fluke with Caligari".