[14] The song has been recorded by several artists since its composition and performance by Van Zandt, with a 1983 version by Willie Nelson and Merle Haggard reaching number one on the Billboard country chart.
The verses of the first stanza introduce Lefty as a restless young soul who leaves home and his loving mother to seek his fortune south of the border.
The verses of the second stanza introduce Pancho as a Mexican bandit, who "wore his gun outside his pants for all the honest world to feel".
The third stanza tells of Pancho's eventual death in "the deserts down in Mexico" and implies that he was betrayed to the federales by Lefty in exchange for being allowed to return to the United States.
The fourth stanza poetizes Pancho's life and appears to evoke sympathy for Lefty's attempted homecoming.
Nelson also recalls how his album with Haggard was nearly completed but he felt they didn't have "that blockbuster, you know, that one big song for a good single and a video, and my daughter Lana suggested that we listen to 'Pancho and Lefty.
The royalties would provide Van Zandt with some badly needed income, though by all accounts he remained impervious to the song's success.
One story involving the song that Van Zandt loved to tell was when he got pulled over for speeding in Berkshire, Texas, by two policemen, the first a blue-eyed white man with a crew cut, and his partner a bronze, dark eyed Mexican.
[21] Although his driver's license was up-to-date, the inspection sticker had expired, and the bedraggled singer found himself in the back of the police cruiser.
Steve Earle told John Kruth in 2004, "You won't find a song that's better written, that says more or impresses songwriters more.
[citation needed] A music video was released for the song in 1983, depicting Willie Nelson as Pancho, and Merle Haggard as Lefty.
[28] In June 2004, Rolling Stone ranked "Pancho and Lefty" 41st on its list of the "100 Greatest Country Songs of All Time".