The game was released in Japan in 1991 amid Palsoft's closure, resulting in a low print run before being re-released by Japanese magazine PC Engine Fan via mail order.

Magical Chase was met with positive reception from critics since its initial launch; it was praised for its colorful cartoon-like presentation, graphical effects, lack of slowdown, sound and gameplay.

[15] Because of Palsoft going bankrupt at the time of its release, the title received a small print run and became a premium item in Japan due to being difficult to find.

[2][20][21][22] Magical Chase was first ported to Windows 95 by RSP Team and published by Bothtec in Japan on April 10, 1998 and was later re-released as a budget title on January 14, 2000.

[24] The game was later ported to Game Boy Color and published in Japan by Microcabin on August 4, 2000 under the title Magical Chase GB: Minarai Mahoutsukai Kenja no Tani e.[b][14] This version faithfully reproduces the parallax scrolling effect, which was characteristic of the PC Engine original, but the visuals and music were simplified due to hardware limitations.

[30] El Nionio and Rocket of Consoles + criticized its presentation but commended the detailed visuals, fast parallax scrolling, sound design, playability and longevity.

[34][35] Electronic Gaming Monthly's four reviewers gave positive remarks to its premise, solid gameplay, music, bizarre enemy designs and cutesy cartoon-like visuals.

[29] VideoGames & Computer Entertainment's Josh Mandel compared its visual style with Air Zonk, giving positive remarks to its simplicity and ambitious graphical effects, lack of slowdown and adequate difficulty.

[40] Retro Gamer's Damien McFerran regarded the TurboGrafx-16 original as one of the system's "perfect ten" games, stating that it is a solid shoot 'em up title past the cute visuals.

[3] IGN's Lucas M. Thomas placed both Magical Chase and Cotton: Fantastic Night Dreams as number four on the top ten list of TurboGrafx titles not released on the Virtual Console, stating that both games were different but shared the same general idea.

[42] The Japanese book PC Engine Complete Guide 1987-1999 praised the original TurboGrafx-16 release for its carefully hand-drawn characters and backgrounds, use of parallax scrolling that pushed the system to its limits and music.