Welles adapted Booth Tarkington's Pulitzer Prize–winning 1918 novel about the declining fortunes of a wealthy Midwestern family and the social changes brought by the automobile age.

The film stars Joseph Cotten, Dolores Costello, Anne Baxter, Tim Holt, Agnes Moorehead and Ray Collins, with Welles providing the narration.

[5] Welles lost control of the editing of The Magnificent Ambersons to RKO, and the final version released to audiences differed significantly from his rough cut of the film.

Composer Bernard Herrmann insisted his credit be removed when, like the film itself, his score was heavily edited by the studio.

Time passes, and Eugene becomes very wealthy manufacturing automobiles, and again courts Isabel, who refuses to risk George's disapproval by telling him about their love.

Lucy instead tells her father a story about an American Indian chief who was "pushed out on a canoe into the sea" when he became too obnoxious, which Eugene understands to be an analogy for George.

Penniless, George gives up his job as a law clerk and finds higher paying work in a chemical factory, which gives him enough money for himself and Fanny to live on.

[10]: 354 [11][12] The Magnificent Ambersons was in production October 28, 1941 – January 22, 1942, at RKO's Gower Street studios in Los Angeles.

The set for the Amberson mansion was constructed like a real house, but it had walls that could be rolled back, raised, or lowered to allow the camera to appear to pass through them in a continuous take.

[15] In a 1973 interview with Dick Cavett, Moorehead recalled the arduous work involved before filming her climactic scene where she sinks against the unheated boiler.

RKO deleted more than 40 additional minutes and reshot the ending in late April and early May, in changes directed by assistant director Fred Fleck, Robert Wise, and Jack Moss, the business manager of Welles's Mercury Theatre.

The retakes replaced Welles's original ending with a happier one that broke significantly with the film's elegiac tone.

Welles did not approve of the cuts, but because he was simultaneously working in Brazil on It's All True for RKO—Nelson Rockefeller had personally asked him to make a film in Latin America as part of the wartime Good Neighbor policy[17]—his attempts to protect his version ultimately failed.

[13] "Of course I expected that there would be an uproar about a picture which, by any ordinary American standards, was much darker than anybody was making pictures," Welles told biographer Barbara Leaming: There was just a built-in dread of the downbeat movie, and I knew I'd have that to face, but I thought I had a movie so good—I was absolutely certain of its value, much more than of Kane… It's a tremendous preparation for the boardinghouse… and the terrible walk of George Minafer when he gets his comeuppance.

A documentary team led by Joshua Grossberg and backed by Turner Classic Movies plans a search for the rough cut in September 2021.[19].

Filmmaker Brian Rose revealed in January 2021 he hopes to restore the original version of the film by use of animation.

In those days we had an enormous public — in the millions — who heard us every week, so it didn't seem pompous to end a movie in our radio style.

[25] Thomas M. Pryor of The New York Times praised The Magnificent Ambersons as "an exceptionally well-made film, dealing with a subject scarcely worth the attention which has been lavished upon it."

He further praised the performances from the cast highlighting Dolores Costello as being "too beautiful and capable an actress to remain inactive for such long periods.

Other fine performances are contributed by Ray Collins, Anne Baxter and the veteran Richard Bennett as the grandfather.

"[27] Harrison's Reports positively wrote the film "is an artistic achievement, excelling in every department—that of direction, acting, production, and photography.

"[28] Herm Schoenfeld of Variety unfavorably compared the film to The Little Foxes (1941), writing that it is "without the same dynamic power of story, acting, and social preachment.

Also unlike 'Foxes,' this film hasn't a single moment of contrast; it piles on and on a tale of woe, but without once striking at least a true chord of sentimentality.

"[31] In the Los Angeles Times, Kevin Thomas argued, "Although reams have been written about the mutilation of Orson Welles's second feature, what remains of it is nevertheless a major accomplishment".

[32] Jonathan Rosenbaum of the Chicago Reader called its mise-en-scène "extraordinary" and wrote that the film contains some of the finest acting in American cinema.

[33] In 1991, The Magnificent Ambersons was selected for preservation in the United States National Film Registry by the Library of Congress as being "culturally, historically, or aesthetically significant".

[48] All pieces were composed by Bernard Herrmann, and were re-recorded by the Australian Philharmonic Orchestra, conducted by Tony Bremner.

In 2002, The Magnificent Ambersons was made as an A&E Network original film for television, using the Welles screenplay and his editing notes.

Directed by Alfonso Arau, the film stars Madeleine Stowe, Bruce Greenwood, Jonathan Rhys Meyers, Gretchen Mol, and Jennifer Tilly.

This film does not strictly follow Welles's screenplay; it omits several scenes included in the 1942 version and has essentially the same happy ending.