Though often considered an art film by modern audiences, Caligari was produced and marketed the same as a normal commercial production of its time period, able to target both the elite artistic market as well as a more commercial horror genre audience. The film was marketed extensively leading up to the release, and advertisements ran even before the film was finished. Many posters and newspaper advertisements included the enigmatic phrase featured in the film, "Du musst Caligari werden!", or "You must become Caligari!" Caligari premiered at the Marmorhaus theater in Berlin on 26 February 1920, less than one month after it was completed. The filmmakers were so nervous about the release that Erich Pommer, on his way to the theater, reportedly exclaimed, "It will be a horrible failure for all of us!" As with the making of the film, several urban legends surround the film's premiere. One, offered by writers Roger Manvell and Heinrich Fraenkel in The German Cinema, suggest the film was shelved "for lack of a suitable outlet", and was only shown at Marmorhaus because another film had fallen through. Another suggested the theater pulled the film after only two performances because audiences demanded refunds and demonstrated against it so strongly. This story was told by Pommer, who claimed the Marmorhaus picked Caligari back up and ran it successfully for three months after he spent six months working on a publicity campaign for the film. David Robinson wrote that neither of these urban legends were true, and that the latter was fabricated by Pommer to increase his own reputation. On the contrary, Robinson said the premiere was highly successful, showing at the theater for four weeks, an unusual amount for the time, and then returning two weeks later. He said it was so well received that women in the audience screamed when Cesare opened his eyes during his first scene, and fainted during the scene when Cesare abducted Jane.
Caligari was released at a time when foreign film industries had just started easing restrictions on the import of German films following World War I. The film was acquired for American distribution by the Goldwyn Distributing Company, and had its American premiere at the Capitol Theatre on 3 April 1921. It was given a live theatrical prologue and epilogue, which was not unusual for film premieres at major theaters at the time. In the prologue, the film is introduced by a character called "Cranford", who identifies himself as the man Francis speaks with in the opening scene. In the epilogue, Cranford returns and exclaims that Francis has fully recovered from his madness. Mike Budd believes these additions simplified the film and "adjusted [it] for mass consumption", though Robinson argued it was simply a normal theatrical novelty for the time. Capitol Theatre runner Samuel Roxy Rothafel commissioned conductor Ernö Rapée to compile a musical accompaniment that included portions of songs by composers Johann Strauss III, Arnold Schoenberg, Claude Debussy, Igor Stravinsky and Sergei Prokofiev. Rotafel wanted the score to match the dark mood of the film, saying: "The music had, as it were, to be made eligible for citizenship in a nightmare country".
Caligari had its Los Angeles premiere at Miller's Theater on 7 May 1921, but the theater was forced to pull it due to demonstrations by protestors. However, the protest was organized by the Hollywood branch of the American Legion due to fears of unemployment stemming from the import of German films into America, not over objections to the content of Caligari itself. After running in large commercial theaters, Caligari began to be shown in smaller theaters and film societies in major cities. Box office figures were not regularly published in the 1920s, so it has been difficult to assess the commercial success or failure of Caligari in the United States. Film historians Kristin Thompson and David B. Pratt separately studied trade publications from the time in an attempt to make a determination, but reached conflicting findings; with Thompson concluded it was a box office success and Pratt concluded it was a failure. However, both agreed it was more commercially successful in major cities than in theaters in smaller communities, where tastes were considered more conservative.
Caligari did not immediately receive a wide distribution in France due to fears over the import of German films, but film director Louis Delluc organized a single screening of it on 14 November 1921, at the Colisée cinema in Paris as part of a benefit performance for the Spanish Red Cross. Afterward, the Cosmograph company bought the film's distribution rights and premiered it at the Ciné-Opéra on 2 March 1922. Caligari played in one Paris theater for seven consecutive years, a record that remained intact until the release of Emmanuelle (1974). According to Janowitz, Caligari was also shown in such European cities as London, Rome, Amsterdam, Stockholm, Brussels, Prague, Vienna, Budapest and Bucharest, as well as other countries like China, Japan, India, Turkey and South American nations.