The film is set in the Ming dynasty under the dominance of eunuchs and explores a variety of themes including the transcendence of dichotomies, Zen Buddhism, feminism, conservative female roles, and the ghost story.

Because the director Hu was a filmmaker in the Shaw Brothers Studio before moving to Taiwan, the emergence of the film established the international visibility of the Hong Kong New Wave.

[4] In a remote mountain village in Ming China, Gu Sheng-zhai is a well-meaning but unambitious scholar and painter, with a tendency towards being clumsy and ineffectual.

A stranger, Ouyang Nian, arrives in town and agrees to his portrait painted by Gu, but his real objective is to bring a female fugitive back to the city for execution on behalf of the East Chamber guards.

Upon doing so, he is no longer the naïve bumbling innocent, but instead becomes confident and assertive, and when Yang's plight is revealed, he insists on being part of it – and even comes up with a fiendish "Ghost Trap" for the East Chamber guards.

The film ends with the injured Yang staggering toward a silhouetted figure, presumably Abbot Hui, seen meditating with the setting sun forming a halo around his head, an image suggesting the Buddha and enlightenment.

Hu explained proudly of the trial and error he went through in the creative process and concluded that he had put together many scenes in less than eight frames challenging the "golden rule" of cinema.

[9] Hu based the screenplay of A Touch of Zen on the ghost story of Xia Nü in Liaozhai Zhiyi, an anthology by Pu Songling.

[15] The director Hu develops an individual perspective of what nation is and transcends the limited dialectics of a totalitarian regime versus a more benevolent government.

[21] Based on the fact that Director Hu's interests in a Chinese genre shengguai (which means gods and spirits), the haunted house as the setting and death traps jiguang suggest Gu's encounters and ally with the supernatural ghosts.

[22] The film adopts the motifs of "Liaozhai gothic", including the goldenrod and alarm system that alerts the unexpected visitors in the haunted house.

[25] In 1971, the film again failed to receive recognition with its release in Hong Kong due to the overwhelming success of Bruce Lee's movie The Big Boss.

"[28] Writing for the Journal of Cinema and Media Studies, academic Héctor Rodríguez noted of the film, "In that film...the director's use of elliptical cuts, diegetic insert shots, and other strategies of visual fragmentation allows characters to float magically through the air across long distances, to reach impossibly high altitudes in a single superhuman leap, and to change direction miraculously in midair.

"[9] In his book, King Hu's A Touch of Zen, academic Stephen Teo wrote that, "this final reduction of the mythical female knight-errant figure into human status is meant to provoke us into a philosophical understanding of ourselves.

The subject of Buddhist transcendence is Hu’s way of delivering the ultimate critique of the genre’s raison d’être which is the audience’s wish-fulfilment for heroes to save them from their own vulnerability.

[33] In 2021, The Daily Star ranked A Touch of Zen 4th on its list of the greatest short story adaptations, writing "Influencing future classics like Crouching Tiger, Hidden Dragon and House of Flying Daggers, there is perhaps no greater film as influential and as underappreciated".

[34] A Touch of Zen was released on DVD for the North American market on 10 December 2002, by Tai Seng Entertainment, with only King Hu's biography and filmography as extras.