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Upon its release the documentary received rave reviews from critics and won several awards including a Sundance Film Festival Grand Jury Prize, a Berlin Film Festival Teddy Bear, an audience award from the Toronto International Film Festival, a GLAAD Media Award, a Women in Film Crystal Award, a Best Documentary award from the Los Angeles, New York, and National Film Critics ' Circles, and it also was named as one of the 1991's best films by the LA Times, the Washington Post, National Public Radio, Time Magazine and others.

' Paris Is Burning ' failed to earn an Academy Award nomination for Best Documentary feature that year, adding to a growing perception that certain subjects and treatments were excluded from consideration for Oscars, and leading, in part, to a change in how documentaries are nominated for the Academy Awards.

Amongst communities of color, response was mixed: critic bell hooks ( writing for Z Magazine ) saw the ball world and participants as politically and personally misguided, and the filmmaker as primarily a white filmmaker portraying a Black and Latino subculture for the entertainment of other white people ; several queer critics of color ( Michelle Parkerson writing for the Black Film Review ; Essex Hemphill writing for The Guardian ; Jacky Goldsby writing for Afterimage ) saw the film as a collection of authentic, powerful voices.

Jesse Green, writing for the New York Times, suggested that making Paris is Burning had enabled Livingston to become a filmmaker, while the film had done nothing for the people in the film.