In a prologue we are introduced to the Nicklebys, who enjoy a comfortable life in the Devon countryside until the father dies and leaves his family with no source of income. Nineteen-year-old Nicholas, his mother, and his younger sister Kate venture to London to seek help from their wealthy, cold-hearted uncle Ralph, an investor who arranges for Nicholas to be hired as a tutor at Dotheboys Hall in Yorkshire and finds Kate work as a seamstress.
Nicholas is horrified to discover his employers, the sadistic Mr and Mrs Squeers, run their boarding school like a prison and physically, verbally, and emotionally abuse their young charges on a regular basis. He eventually rebels and escapes, taking with him the young, crippled Smike. As they journey to London, they stumble upon a theatrical troupe owned and operated by Mr. and Mrs. Crummles. They cast them in a production of Romeo and Juliet, but despite a successful first night and the couple's invitation to stay, Nicholas is determined to continue their journey to London to learn how his mother and sister are faring.
Nicholas is reunited with his family, who welcome Smike as one of their own, and finds clerical employment with the friendly Cheeryble brothers. While thus employed, Nicholas makes the acquaintance of Madeline Bray, an artist who financially supports both herself and her tyrannical father, as her father gambled away his fortune and that of his late wife. Nicholas meanwhile discovers his sister Kate has been subjected to humiliating sexual attention from the lecherous Sir Mulberry Hawk, a client of their uncle, who has encouraged the man to seduce his niece in the hope that she will succumb and thus cement Hawk's business relationship with him.
Nicholas' determination to defend his sister's honor leads his uncle to vow he will destroy the young man. What ensues is a series of adventures in which the upstanding Nicholas manages to survive the schemes of his evil uncle, including an attempt to return Smike to Squeers by kidnapping him and an effort to abort Nicholas' growing relationship with Madeline by promising her father he will excuse his debts if the girl weds Hawk. Ralph's designs on Madeline are thwarted when her father dies unexpectedly. Unfortunately, Smike falls ill and soon dies. Soon after, a sinister secret Ralph has harbored for years surfaces, and it is revealed Smike was Ralph's son, whom he had thought dead. Realizing that his son had died the best friend of his most hated enemy, Ralph hangs himself. Nicholas marries Madeline and settles with her in Devon at his father's house and grounds, where Smike is buried.
In Creating a Classic: The Making of Nicholas Nickleby, a bonus feature on the film's DVD release, screenwriter/director Douglas McGrath and his cast and crew discuss the development of the project. The positive audience reaction to a stage reading of the screenplay in a theater in lower Manhattan, which included a number of actors who eventually were cast in the film, convinced McGrath to proceed with the movie. At the request of production designer Eve Stewart, he advanced the time frame from the 1830s to the 1850s so she could incorporate elements of the Industrial Revolution into her design plans.
Jamie Bell's audition for the role of Smike in a London hotel room left McGrath and the producers in tears, and they cast him on the spot. While considering Mrs. Crummles, a smug, opinionated, but lovable dowager, McGrath realized all her traits and characteristics were embodied by Dame Edna Everage, alter ego of actor Barry Humphries, but was hesitant to suggest casting a male in the role. The producers, however, agreed Humphries was an ideal choice. Nicholas was one of the last roles to be cast. Charlie Hunnam had been sent the script, but several months passed before he had an opportunity to read it. He met with McGrath, and based on a couple of hours of conversation with the actor, the director felt he finally had found the right man for the part. Ironically, the British Hunnam had to work with a dialect coach; having lived and worked in the US for the past several years, he had perfected an American accent in order to ensure regular employment.
Costume designer Ruth Myers opted to dress two of the leading characters in clothing pre-dating the period in which the film is set in order to suggest Nicholas, as the newly anointed head of his family, wore clothing inherited from his father, and the impoverished Madeline's dresses were hand-me-downs from her mother.
Locations used in the film included the abandoned 19th century Gibson Mill in Hardcastle Crags; Hebden Bridge in West Yorkshire; Churchill College at the University of Cambridge; and Wilton's Music Hall, the Old Vic, and the Reform Club in London. Interiors were filmed in Elstree Studios in Borehamwood and Three Mills Studios in the East End of London.
The film received positive reviews from critics. Review aggregator Rotten Tomatoes reports that 77% out of 122 professional critics gave the film a positive review, with a rating average of 6.8/10 and the critical consensus being: "Thanks to a strong cast of experienced actors and director Douglas McGrath's steady hand, Nicholas Nickleby is a worthy and respectful adaptation of the Dickens novel."
In his review in The New York Times, A.O. Scott called the film "two hours of swift, engaging entertainment" and added, "The book's theme and spirit have been dutifully respected. No, what Mr. McGrath has done with admirable modesty is better than that. Rather than trying to update, transform or otherwise interpret Nickleby, he has decided to share his enthusiasm for it . . . [He] has adapted [Dickens' dialogue] with a scholar's ear and a showman's flair . . . [and] produced a colorful, affecting collage of Dickensian moods and motifs, a movie that elicits an overwhelming desire to plunge into 900 pages of 19th-century prose."
Roger Ebert of the Chicago Sun-Times said, "The movie is jolly and exciting and brimming with life, and wonderfully well-acted."
In the San Francisco Chronicle, Mick LaSalle observed, "It took Dickens 65 chapters, and it took the famous stage production eight hours to tell the story of Nicholas Nickleby. But in the new movie, writer-director Douglas McGrath manages to tell it all in 132 minutes, without the story ever seeming rushed or curtailed. Instead, the impression is one of abundance: It's a generous tale, told through big performances by a talented cast."
Peter Travers of Rolling Stone awarded the film three out of a possible four stars and commented, "Christopher Plummer steals the show without resorting to camp as Nicholas' wounded and wounding Uncle Ralph. It's a great performance and a reminder of Dickens' grandeur. This CliffsNotes of a film, though lively fun, only hints at that. No matter. I'll take the hint."
In Variety, David Rooney described the film as "a delightful experience. The sacrifices of condensing Dickens' massive novel to standard feature length are discernible, especially in the title character's discovery of love. But while it's told in conventional fashion, the heart of this tale of a young man's quest to rescue his family from villainy and misfortune is lovingly rendered by a mostly superlative cast and with an entertaining balance of humor and pathos . . . McGrath's approach is old-fashioned but appealing, using a novelistic style that relies on voiceover to get through much of the initial exposition. His script captures the scope, humor and compassion of Dickens' novel and drives the picaresque story along at a lively clip."
The film grossed $1,587,173 in the U.S. and $2,064,289 in foreign markets for a total worldwide box office of $3,651,462.
The film was nominated for the Golden Globe Award for Best Motion Picture - Musical or Comedy. It received the National Board of Review Award for Best Cast, and Romola Garai was nominated for the Jameson People's Choice Award for Best European Actress at the European Film Awards.