Chambers borrowed the names Carcosa, Hali and Hastur from Ambrose Bierce: specifically, his short stories "An Inhabitant of Carcosa" and "Haïta the Shepherd". There is no strong indication that Chambers was influenced beyond liking the names. For example, Hastur is a god of shepherds in "Haïta the Shepherd", but is implicitly a location in "The Repairer of Reputations", listed alongside the Hyades and Aldebaran.
Brian Stableford pointed out that the story "The Demoiselle d'Ys" was influenced by the stories of Théophile Gautier, such as "Arria Marcella" (1852); both Gautier and Chambers' stories feature a love affair enabled by a supernatural time slip.
H. P. Lovecraft read The King in Yellow in early 1927 and included passing references to various things and places from the book—such as the Lake of Hali and the Yellow Sign — in "The Whisperer in Darkness" (1931), one of his seminal Cthulhu Mythos stories. Lovecraft borrowed Chambers' method of only vaguely referring to supernatural events, entities, and places, thereby allowing his readers to imagine the horror for themselves. The imaginary play The King in Yellow effectively became another piece of occult literature in the Cthulhu Mythos alongside the Necronomicon and others.
In the story, Lovecraft linked the Yellow Sign to Hastur, but from his brief (and only) mention it is not clear what Lovecraft meant Hastur to be. August Derleth developed Hastur into a Great Old One in his controversial reworking of Lovecraft's universe, elaborating on this connection in his own mythos stories. In the writings of Derleth and a few other latter-day Cthulhu Mythos authors, the King in Yellow is an Avatar of Hastur, so named because of his appearance as a thin, floating man covered in tattered yellow robes.
In Lovecraft's cycle of horror sonnets, Fungi from Yuggoth, sonnet XXVII "The Elder Pharos" mentions the last Elder One who lives alone talking to chaos via drums: "The Thing, they whisper, wears a silken mask of yellow, whose queer folds appear to hide a face not of this earth...".
In the Call of Cthulhu roleplaying game published by Chaosium, the King in Yellow is an avatar of Hastur who uses his eponymous play to spread insanity among humans. He is described as a hunched figure clad in tattered, yellow rags, who wears a smooth and featureless "Pallid Mask". Removing the mask is a sanity-shattering experience; the King's face is described as "inhuman eyes in a suppurating sea of stubby maggot-like mouths; liquescent flesh, tumorous and gelid, floating and reforming".
Although none of the characters in Chambers' book describe the plot of the play, Kevin Ross fabricated a plot for the play within the Call of Cthulhu mythos.