Some time after the death of his wife Heather in the 16th century, Connor travels to Japan to request training from the Immortal Japanese sorcerer Nakano. Nakano lives in a cave of Mount Niri, and has a reputation as a master of Illusion. Another Immortal, Kane, is also interested in mastering the power of Illusion and is making his way across Asia, with two henchmen in tow (Khabul Khan and Senghi Khan). They burn a village, massacre its population and eventually reach the cave. Kane defeats and decapitates Nakano, despite Connor's attempts to save him. The energies released during the Quickening cause the cave to collapse. The Highlander manages to escape, but Kane and his men are trapped. Their situation prevents them from participating in "The Gathering" of 1985.
In 1788–89 in France, Connor makes the acquaintance of Sarah Barrington, an Englishwoman visiting relatives. The two become lovers, but when the French Revolution begins, MacLeod becomes involved. He is captured and sentenced to death for treason against King Louis XVI of France. He is saved by his Immortal friend Pierre Bouchet, who tells him he is tired of his immortal life, and dupes the guards into executing him in MacLeod's place. As Connor is reported deceased, Sarah, believing her lover dead, marries another man and has children with him.
In 1994, Connor is living with his adopted son John in Marrakesh. Brenda Wyatt, the woman he married after the Gathering, was killed in a car accident in 1987. Although Connor survived the accident, he still believes that "The Game" is over. In Japan, two archaeologists have excavated a cave to discover whether the legend of the sorcerer Nakano is true. One of the archaeologists, Dr. Alexandra Johnson, whose interests will lead her to Connor MacLeod, resembles Sarah Barrington.
The excavations free Kane, who sets out in pursuit of Connor, sending Khabul ahead and beheading Senghi to gain his power. MacLeod leaves John in the care of his friend, Jack Donovan, and departs to New York City to engage in the final showdown for the Prize. When he arrives, he is found by Khabul: the two fight, and Connor wins. When Khabul's decapitated body is found, Lt. John Stenn goes on the trail of the main suspect of the 1985 "headhunter" case, Russell Nash – Nash was the alias used by MacLeod during the time of the Gathering. As Alex investigates a piece of cloth found on the site, she discovers that it is a shred of a kilt, with a design that designates a branch of the MacLeod family. This leads her to Nash Antiques, where Connor has returned in preparation for the battle against Kane. The Highlander is confronted at a former Buddhist shrine by Kane, who challenges him. Fighting on the holy ground is a violation of the Immortal Golden Rule; the battle ends when the blade of MacLeod's katana is shattered. Kane flees, and Connor decides to return to the Scottish Highlands to build another sword though his initial attempts are unsuccessful.
Alex tracks him down to give him a bar of finely refined steel that she found in Nakano's cave with which he forges into a new sword, and the two become lovers. MacLeod learns from Jack Donovan that his son John is on a plane for New York. Kane abducts John, and holds him hostage to lure MacLeod. MacLeod meets Kane in an old church mission in Jersey City, and follows him into an abandoned power plant for their final battle. The Highlander defeats Kane, wins the Prize by receiving the final Quickening, and returns to Scotland with Alex and John to live out the rest of his natural life.
Stephen Holden of The New York Times remarked, "How could an action-adventure film that cost $34 million, most of which clearly went into pyrotechnics, computerized special effects and scenic locations, end up looking cheap, silly and lifeless? [Highlander III: The Sorcerer is] an incoherent mess [and] has performances that are one-dimensional even by the undemanding standards of the genre."
The BBC's review gave the film a score of two stars out of five, saying: "This is a far superior film to Highlander II [but] it is really a copy of the first one. ... It really feels as if the Highlander story has no more to give us—but that would be very wrong. Perhaps the best thing this third movie did was promote the generally better TV series."
Christopher Null of FilmCritic.com also gave Highlander III two stars out of five, saying: "The third in a line of increasingly perplexing Highlander movies, Highlander: The Final Dimension steals wholesale the plot from the original, just throwing in some fresh faces. ... Ultra-fans will rejoice in the face of the third installment—and it's nowhere near as bad as Highlander II—but most of you can give it a pass."
In retrospective, the film holds a 5% approval rating on Rotten Tomatoes based on 20 reviews.
The film debuted at #2 in the U.S. box office, grossing $5.6 million. The following week it dropped to 7th place, taking in $2.9 million. Highlander III: The Sorcerer finished its U.S. theatrical run with a gross of $12.3–$13.7 million.
The movie completely ignores the events of Highlander II and makes no mention of them. Also, in a 1996 Cinefantastique interview, Highlander producer William Panzer mentioned that several references to the TV series' continuity were inserted into this film as a means of linking it to the TV universe.
Many of the locations in Scotland from the original film were revisited for this sequel. Several scenes were shot in province of Quebec in Canada: the medieval Japanese village and the building in which Nakano's cave is found were shot near Montreal. Plus, many sequences in New York were actually shot in Montreal, as well. Other scenes for this film were shot in Morocco.
The U.S. theatrical release was rated PG-13 (the rating is slightly noticeable in the poster featured on this page), and a slightly-longer R-rated Special Director's Cut was later released on home video with two sex scenes trimmed from the theatrical release restored. On top of this, additional violence was reinstated, mainly the shot of Kane's head rolling off. The PG-13 theatrical cut originally only showed Kane's head wobbling from side to side, then cutting immediately to the extreme close-up on Connor saying, "There can be only one."
Furthermore, several enhanced visual effects shots are present in the American version, including Kane's arrival in New York City (via a teleportation portal, instead of stepping off of a freighter in the international version), as well as during the final Quickening sequence (where several additional shots of Connor levitating are seen, complete with new VFX work). Also, the American Final Dimension cut includes alternate musical tracks and cues (including the song "God Took a Picture" during the ending credits instead of Loreena McKennitt's "Bonny Portmore," and a rock-instrumental version of Mötley Crüe's "Dr. Feelgood" during the final battle between MacLeod and Kane)."Ce He Mise le Ulaingt? The Two Trees" by Loreena McKennitt available on her album The Mask and Mirror
"Bonny Portmore" by Loreena McKennitt, available on her album The Visit
"God Took A Picture" by Suze DeMarchi
"Bluebeard" by Cocteau Twins
"Dr. Feelgood" by Mötley Crüe (instrumental riff)
"Dummy Crusher" by Kerbdog
"Little Muscle" by Catherine Wheel
"Boom Boom" by Definition Of Sound
"Honest Joe" by James