Reviews for The Lady from Shanghai were initially mixed. Variety magazine found the script wordy and noted that the "rambling style used by Orson Welles has occasional flashes of imagination, particularly in the tricky backgrounds he uses to unfold the yarn, but effects, while good on their own, are distracting to the murder plot."
A more recent Time Out Film Guide review states that Welles simply didn't care enough to make the narrative seamless: "the principal pleasure of The Lady from Shanghai is its tongue-in-cheek approach to story-telling." One recent book on Film Noir praises the film for its pervasive atmosphere of malaise and its impressive, extraordinary technical mastery.
Although The Lady From Shanghai was acclaimed in Europe, it was not embraced in the U.S. until several decades later. Review aggregator Rotten Tomatoes reports an 86% approval from critics, and an average rating of 8.1/10. Influential modern critics including David Kehr have subsequently declared it a masterpiece, with Kehr calling it "the weirdest great movie ever made." In the British Film Institute's 2012 Sight & Sound poll, six critics each ranked it one of the 10 greatest films of all time.