Partially based on William Hope Hodgson's short story "The Voice in the Night", it centers on a group of castaways on an island who are unwittingly altered by a local species of mutagenic mushrooms.

Upon the film's release in Japan, it was nearly banned due to scenes that depicted characters resembling victims of the atomic bombings of Hiroshima and Nagasaki.

Quarantined in a Tokyo mental hospital, a psychology professor named Kenji Murai is visited by a group of doctors asking him about the events that led him there.

He then relates the story of his band of day trippers on a yacht: Murai, wealthy industrialist Masafumi Kasai (the owner of the yacht), salaryman skipper Naoyuki Sakuda, his shipmate assistant Senzō Koyama, celebrity writer Etsurō Yoshida, professional singer Mami Sekiguchi, and student Akiko Sōma.

In doing so, they begin to suspect that the ship was connected to nuclear tests conducted in the vicinity of the island, with the resultant fallout forcing a bizarre mutation on various organisms native to the surrounding area, including the mushrooms.

One night, as Kasai is raiding the food stores, he is attacked by a grotesque-looking man who promptly disappears after encountering the group.

He finds a note left behind by Naoyuki listing the names of those on the island as dead and how, having now run out of food and energy, he has decided to jump into the sea.

Murai attempts to rescue Akiko, but he is overwhelmed by the mushroom creatures and flees without her, making his way onto the yacht and escaping the island.

[5] Honda was also inspired by a news story about a group of rich kids who took their father's yacht far into the sea and had to be rescued.

Early drafts featured characters paralleling their real-life counterparts, as well as reports of ships and aircraft vanishing in the Bermuda Triangle.

[11] Critic Bill Cooke noted in Video Watchdog that Matango defies easy categorization as a film belonging to either the kaiju (monster) or kaidan (ghost) genres of the era.

[1] According to Yoshio Tsuchiya, Honda took the project seriously, telling actors before production that the film was "a serious drama picture, so please keep this in mind and work accordingly".

[14] Matango was Honda's first film to use the Oxberry optical printer, which Toho purchased from the United States to allow for better image compositing.

[14] Matango was nearly banned in Japan because some of the makeup resembled the facial disfigurements characteristic of the victims of the atomic bombings of Hiroshima and Nagasaki.

[1] Prior to Matango's release on home video, Galbraith noted that the film was shown frequently on American television during the 1960s and 1970s, but as of 1994, it "ha[d] all but disappeared".

[11] Lucas also noted that "Matango looks splendid on Tokyo Shock's disc, its anamorphic transfer retaining the naturalistic colour of the earlier Toho Video laserdisc release with brighter contrast and a slightly more generous (2.53:1) screen width".

[18] Matango has been described as a "virtually unknown film", except to "aficionados of Asian cult cinema, fans of weird literature, and sleepless consumers of late-night television programming".

[11] Cooke described the film as "a classic from Japan's early-Sixties horror boom" and as "some of the finest work of Ishiro Honda".

[22] Honda reflected on Matango decades afters its initial release, stating that it was a comment on the "'Rebel era" in which people were becoming addicted to drugs.

[25] Director Steven Soderbergh stated he had wanted to make a remake of Matango, describing it as a film that he watched as a child that "scared the shit out of me".

[29] In the book Monsters and Monstrosity from the Fin de Siecle to the Millennium: New Essays, Camara stated that Matango would leave an imprint on Japanese cyberpunk influenced body horror films of the future such as Sogo Ishii's Electric Dragon 80.000 V, Shozin Fukui's Pinocchio 964 and Yoshihiro Nishimura's Tokyo Gore Police.