The story hinges on the wager that comes half-way through the book when Julius bets Morgan that he will be able to break up Simon and Axel's relationship.

In The New York Times, Christopher Lehmann-Haupt praised its ingenious plot and "comic spirit", and called it "the most entertaining Iris Murdoch I've read in years".

[7][8] The literary critic and Murdoch biographer Peter J. Conradi describes A Fairly Honourable Defeat as a "brilliant and decisive masterpiece", and the novel with which she entered a "new artistic maturity" in which plot and characters are equally balanced.

[2]: 201–202  Literary scholars have examined various aspects of the novel, including its attempt to portray, in Tallis, an "interesting" good character, and its sympathetic depiction of a loving and stable homosexual relationship only three years after the Sexual Offences Act of 1967 decriminalized private sexual acts between adult men.

[10] In 2022 British religious scholar Karen Armstrong said she left a book club when its members dismissed the novel as "evil.