Last Action Hero failed to meet the studio's expectations at the box office, and was both a critical and commercial disappointment.

Since its release Last Action Hero gained a cult following,[7] with some noting it as underrated in Schwarzenegger's catalogue.

[8][9][10][11] Ten-year-old Danny Madigan lives in a crime-ridden area of New York City with his widowed mother, Irene.

Nick gives Danny a golden ticket once owned by Harry Houdini and invites him to watch Jack Slater IV.

During the film, the ticket stub transports Danny into the fictional world, interrupting Slater during a car chase.

Danny says that Slater's friend John Practice should not be trusted as he "killed Mozart" (since he is played by the same actor as Antonio Salieri in Amadeus).

There, Slater, his daughter Whitney, and Danny thwart the attack, though Benedict gets the ticket stub and discovers that it can transport him into the real world.

After Vivaldi's plan fails, Benedict kills him and uses the stub to escape into the real world, pursued by Slater and Danny.

With Slater losing blood, Danny knows the only way to save him is to return him to the fictional world, where his injury will become a flesh wound.

The ticket stub falls in front of a theatre playing The Seventh Seal, where The Figure of Death emerges from the screen.

[15][16] Penn and Leff disliked various parts of the final film, including the idea of a magic golden ticket.

Years after its release, the film was the subject of a scathing chapter called "How They Built The Bomb", in the Nancy Griffin book Hit and Run which detailed misadventures at Sony Pictures in the early to mid-1990s.

[30] The film premiered in Westwood, Los Angeles on June 13, 1993, and entered general release in the United States five days later.

On February 3, 2009, Last Action Hero was reissued on DVD by Sony Pictures Home Entertainment in a double-feature set with the 1986 film Iron Eagle.

An Ultra HD Blu-ray restored version was released on May 18, 2021, and featured a director's commentary track, deleted scenes, an alternative ending, and the original theatrical trailer, all in 4K.

Schwarzenegger states that he tried to persuade his coproducers to postpone the film's June 18 release in the United States by four weeks, but they turned a deaf ear on the grounds that the film would have lost millions of dollars in revenue for every weekend of the summer it ended up missing, also fearing that delaying the release would create negative publicity.

[46] Roger Ebert gave the film 2.5 stars out of 4, writing that despite some entertaining moments, Last Action Hero "plays more like a bright idea than like a movie that was thought through.

It doesn't evoke the mystery of the barrier between audience and screen the way Woody Allen did in The Purple Rose of Cairo, and a lot of the time it simply seems to be standing around commenting on itself.

"[47] Vincent Canby likened the film to "a two-hour Saturday Night Live sketch" and called it "something of a mess, but a frequently enjoyable one".

[48] Owen Gleiberman of Entertainment Weekly wrote: "Last Action Hero makes such a strenuous show of winking at the audience (and itself) that it seems to be celebrating nothing so much as its own awfulness.

"[49] Variety called it "a joyless, soulless machine of a movie, an $80 million-plus mishmash of fantasy, industry in-jokes, self-referential parody, film-buff gags and too-big action set-pieces.

It was actually all a little unfair, because this is a smart, funny blockbuster [...] Schwarzenegger has rarely been better and he is backed up by a never-ending stream of star names in cameo roles [...] And, although McTiernan has fun spoofing the conventions of the action genre, he still manages to slip in some spectacular set pieces.

About the film's failure and critical response, John McTiernan said: Initially, it was a wonderful Cinderella story with a nine-year-old boy.

Director James Cameron said that he had called Schwarzenegger the weekend after Last Action Hero opened and recalled that it was the only time he's "ever heard him down."

In October 2019, Schwarzenegger said that he was open to starring in sequels to Last Action Hero and True Lies (1994) if there was sufficient fan interest.