The film performed poorly at the box office. It is one of the few mainstream American films of the 1970s that has never been released on VHS in the United States. Until Sony released a DVD of the film in 2011, a limited-edition laserdisc release in the early 1990s was the only U.S. home video release.
The castle set from Camelot was recycled and used as the lamasery. This was the first motion picture that Columbia Pictures filmed after it moved onto the Warner Bros. Studio Lot in 1972, creating The Burbank Studios to facilitate both production companies. For "Lost Horizon's" mythical setting of Shangri-La, the medieval turrets of the Camelot castle on the studio's main back-lot were removed and replaced with Tibetan gables to simulate Himalayan Buddhist monasteries. Most of the lower levels of the castle remained intact, and the courtyard was replaced with layered steppes and fountains. This set remained on the studio's back-lot for several years before it was torn down to make way for a new office building, and it can be seen in many episodes of "Kung Fu," in which it was often used as an exterior set.
Michael York has said that despite Ross Hunter's reputation for lush productions, York actually found the decor rather tacky. Since the lamasery scenes were filmed in Burbank during a hot summer, he began to call the location "Shangri-La in the Smog".
Pierre Cardin put out a line of costume jewelry, watches and belts "inspired by Lost Horizon". Likewise, Marrakech, Ltd. had a line of "Lost Horizon" shirts for men, Periphery a line of women's attire, Rijir a line of colognes and soaps, and Brown Jordan a line of rattan furniture all designed for that Shangri-La look. Craft Masters even put out a paint-by-number set and Saalfield marketed a "Lost Horizon" coloring book.
One of the films included in "The Fifty Worst Films of All Time (and how they got that way)" by Harry Medved and Randy Lowell. "Esquire" called it "The worst movie of the year," and "Cue" critic William Wolf dubbed it, "Atrocious... lame-brained... Some $6 million was spent on this worst-of-worst remake". Not even "Song of Norway" (1970) or the much-maligned 1972 film version of "Man of La Mancha" received such horrible reviews.
Professional vocalists Jerry Whitman and Diana Lee provided the singing voices for Peter Finch and Liv Ullmann, respectively. The married twosome also sang on the Disneyland Records release "The World Is A Circle", which featured a handful of songs from "Lost Horizon" as well as other show tunes.
Touring back-up singer and session-vocalist Jerry Whitman, who provided the singing voice for Peter Finch, was under obligation not to reveal his vocal participation. "They didn't want me capitalizing on it or putting out a press release," Whitman now says. "But the movie turned out to be such a bomb, I don't think anyone would care if I talk about it now."
In a 1975 magazine interview with Rona Barrett, producer Ross Hunter acknowledged the failure of his film. "When we hired Bacharach and David to write the songs, we didn't know they were on the verge of dissolving their partnership. When they finally delivered the music, we were already deep into preproduction. We knew it was a bum score, but we couldn't do anything about it."