When M. Butterfly was first performed in 1988 in Washington D.C. and then on Broadway, reviews were decidedly mixed. Most critics acknowledged that Hwang was a playwright of great talent, but praise for the play was often tempered by some harsh criticism. On the positive side, Frank Rich in the New York Times described M. Butterfly as "a visionary work that bridges the history and culture of two worlds’’ and ‘‘as intricate as an infinity of Chinese boxes.’’ He added that ‘‘one must [be] grateful that a play of this ambition has made it to Broadway.’’ But Rich had some serious reservations also, writing that the play did not rise to its full power until the final act; it was marred by repetition and "its overly explicit bouts of thesis mongering'' (the dramatist's tendency to pursue his central ideas in a didactic manner). Several other critics, including John Gross, in another New York Times review, and John Simon, in New York magazine, expressed a similar view.

However, William A. Henry III, in Time, had no such reservations, calling M. Butterfly ‘‘brilliant" and praising the ambitious scale of the work: "Hwang displays astonishing command of his material and craft.’’ Henry also praised the director, John Dexter, who "fuses the presentational style of opera with confessional scenes that address the audience directly,’’ and B. D. Wong, the actor who played Song, who moves from "hauntingly persuasive female victim ... [to] cocky and unrepentant man.’’

Jack Kroll in Newsweek was considerably less enthusiastic. While acknowledging that Hwang was a ‘‘very clever and gifted playwright,’’ Kroll complained that Hwang ‘‘has concocted a play that consumes itself in its own cleverness, that takes so many twists and turns that it spins itself into a brilliant blur.’’ Kroll's main objections were, first, that Madame Butterfly, written in 1904, was not a relevant symbol of relations between East and West in the late twentieth century; second, that the playwright offered no real insight into why Gallimard failed to realize that Song was a man; and third, the references to the Vietnam war were completely unconvincing. Kroll's conclusion was that "Hwang is a natural playwright whose desire to astonish has subverted the intellectual legitimacy of his play.’’

Reviews in The Nation, The New Republic and the Washington Post were mostly on the negative side. For David Richards in the Post, for example, Hwang pays "entirely too much attention to footnotes, ironic asides and running commentary on such issues as male sexuality and how America lost the Vietnam war (related topics in Hwang's view).'' According to Richards, some of the more puzzling aspects of the affair between Gallimard and Song remain unanswered, such as ‘‘Was [Gallimard] merely the hapless victim of an astounding scheme or did he, in fact, realize deep down that he was involved in a masquerade and choose to embrace it anyway?"

Whatever may have been the reservations of some theatre critics, the fact that M. Butterfly won so many awards, including the Tony Award for Best Play of the Year, and was nominated for a Pulitzer Prize, shows that the play was held in considerable esteem by those qualified to judge it. And within eighteen months, M. Butterfly had become a hit on the international stage, with productions mounted in London, Buenos Aires, and Hamburg, and bookings already made for Paris, Brussels, Oslo, Copenhagen, Rome, Madrid, Tokyo, Tel Aviv, Sydney, Auckland, Rio de Janeiro, Mexico City, San Juan, and New Delhi. M. Butterfly reached an even wider audience when the film version, with screenplay written by Hwang, was released in 1993.

After drama reviewers had had their say, the more in-depth work of literary scholars and critics began to appear. Critics have used M. Butterfly to further explore the presence of stereotypes of Asians, both men and women, in American literature and film, and the play has been examined through a variety of interpretive frameworks, especially feminist and gay. Although Hwang has written other plays since M. Butterfly, as well as screenplays and opera librettos, M. Butterfly remains his most acclaimed work.