The film was screened out of competition at the 1989 Cannes Film Festival.
In a story loosely based on Fyodor Dostoevsky's short novel The Gambler, Nick Nolte plays Lionel Dobie, an acclaimed abstract artist who finds himself unable to paint during the days before the scheduled beginning of a major gallery exhibition of his new work. Rosanna Arquette is Paulette, his apprentice/assistant and former lover. Lionel is still infatuated with her, but Paulette wants only his tutelage, which makes things difficult since they live in the same studio-loft. Paulette dates other people, including a performance artist (Steve Buscemi) and a painter (Jesse Borrego).
These deliberate provocations on Paulette's part make Lionel insanely jealous — and fuel his creativity. Lionel and Paulette, it becomes clear, have been using each other: Lionel using her sexually, Paulette using him as a means of entry to the higher spheres of the New York social and art scene. Paulette wants to give up and go home to her parents but Lionel persuades her to stay because New York is where a painter needs to be.
Lionel pours his anxiety and repressed passion into his work. Paintings around the studio show visual metaphors from relations past: stormy skies, burning bridges, and tormented clowns. Lionel realizes that he needs the emotional turmoil of his destructive relationships in order to fuel his art. In the last scene, at the art exhibit, Lionel meets another attractive young woman, a struggling painter. He persuades her to become his assistant, and potentially his lover, beginning the cycle anew.
Zoë (Heather McComb) is a schoolgirl who lives in a luxury hotel. She helps return to an Arab princess a valuable piece of jewelry that the princess had given to Zoë's father (Giancarlo Giannini) and had been subsequently stolen and recovered. Zoë tries to reconcile her divorced mother, a photographer (Talia Shire), and father, a flute soloist.
New York lawyer Sheldon Mills (Woody Allen) has problems with his overly critical mother Sadie Millstein (Mae Questel). Sheldon complains constantly to his therapist about her, wishing aloud that she would just disappear. Sheldon takes his shiksa fiancée, Lisa (Mia Farrow), to meet his mother, who immediately embarrasses him. The three, as well as Lisa's children from a previous marriage, go to a magic show. His mother is invited on stage to be a part of the magician's act. She is put inside a box that has swords stuck through it and she disappears, just as she is supposed to, but then she never reappears.
Although he is furious at first, this development turns out to be great for Sheldon because, with her out of his life, he can finally relax. But soon, to his horror, his mother reappears in the sky over New York City. She begins to annoy Sheldon and Lisa (with the whole city now watching) by constantly talking to strangers about his most embarrassing moments. This puts a strain on his relationship with Lisa, who leaves him. Sheldon is persuaded by his psychiatrist to see a psychic, Treva (Julie Kavner), to try to get his mother back to reality. Treva's experiments fail, but Sheldon falls for her, possibly finding her to be very similar to his mother (see Oedipus complex). When he introduces Treva to his mother, she finally approves and comes back to Earth.
The trailer contains three shots from the "Zoe" segment not in the actual film: (1) Zoe ordering room service, (2) A boy slams a pie in a girl's face at a party, and (3) A different angle of Zoe's parents kissing right before Zoe yells "cut". The trailer can be found on the 2012 Blu-ray edition.
New York Stories opened on March 3, 1989, earning $432,337 in 12 theaters over its opening weekend. The film went on to gross $10,763,469 domestically playing in 514 theaters.
New York Stories currently holds a 73% 'Fresh' rating on Rotten Tomatoes.
Allen and Scorsese's segments of the film have generally been praised. However, Hal Hinson, writing in The Washington Post felt that Coppola's segment was "by far the director's worst work yet." Roger Ebert of the Chicago Sun-Times gave the film two and a half stars, saying "New York Stories consists of three films, one good, one bad, one disappointing." He further explained, "Of the three films, the only really successful one is 'Life Lessons,' the Scorsese story of a middle-age painter and his young, discontented girlfriend. The Coppola, an updated version of the story of Eloise, the little girl who lived in the Plaza Hotel, is surprisingly thin and unfocused. And the Allen, about a 50-year-old man still dominated by his mother, starts well but then takes a wrong turn about halfway through."