Released by Universal Pictures, the film was director Hooper's first major studio production after Eaten Alive (1977) and The Texas Chain Saw Massacre (1974). Upon its release on March 13, 1981, it has grossed $7.8 million and received mixed-positive reviews from critics.
A masked intruder attacks teenager Amy as she showers (resembling the famous shower scene from Psycho). The attacker turns out to be her younger brother Joey, a horror movie buff, and his weapon is merely a fake knife. He has played the first of several practical jokes on her.
Against her father's wishes, Amy visits a sleazy traveling carnival with her new boyfriend Buzz, her best friend Liz, and Liz's irresponsible boyfriend Richie. At the carnival, the four teens smoke marijuana, peep into a 21-and-over strip show, heckle fortune teller Madame Zena, visit the freaks-of-nature exhibit, and view a magic show.
Richie dares the group to spend the night in "The Funhouse", which is actually a dark ride. After the park closes, the teenagers settle down inside the ride, at which point they witness the ride assistant, a silent man in a Frankenstein's Monster mask, engage Zena as a prostitute. He experiences premature ejaculation, but despite his request Zena will not return her $100 fee. He murders her in a violent rage.
The teenagers try to leave, but find themselves locked inside the ride. As they attempt to escape, Richie secretly steals the money from the safe from which the masked assistant took Zena's fee. The ride's barker, Conrad Straker, discovers what his son Gunther Twibunt (the masked assistant) has done to Zena. Conrad also realizes that the money is missing. Thinking Gunther took it, he attacks him. Gunther's face is revealed to be gruesomely deformed with sharp protruding teeth, long white-thinning hair, and red eyes.
The teens see this, and Conrad realizes someone is watching after Richie's lighter falls on the floor from the ceiling he and the others were hiding in. Buzz figures that Richie has the money; he (Richie) insisted that he thought they were going to get out and that he would have split the money to the others. Despite Liz wanting to return the money, Buzz knows it's too late since they are now in danger. Conrad stalks the ride to eliminate any witnesses and heckles Gunther into a murderous rage. The teens soon armed themselves with the various ride props as weapons. Richie and Liz die by the hands of Conrad and Gunther, respectively. Buzz kills Conrad, but is then killed by Gunther. During a showdown between Gunther and Amy in the funhouse's maintenance area, Gunther is electrocuted and crushed to death between two spinning gears.
As dawn breaks, a traumatized Amy emerges from the funhouse while the animatronic fat lady perched atop the ride laughs as she heads home.Elizabeth Berridge as Amy Harper
Cooper Huckabee as Buzz
Largo Woodruff as Liz
Miles Chapin as Richie
Kevin Conway as Freak Show Barker/Strip Show Barker/Conrad Straker (The Funhouse Barker)
Wayne Doba as Gunther Twibunt (The Monster)
Sylvia Miles as Madame Zena
William Finley as Marco the Magnificent
Shawn Carson as Joey Harper
Rebuka Hoye as Strip Show Dancer
Jack McDermott as Mr. Paul Harper
Jeanne Austin as Mrs. Ellen Harper
The Funhouse was written by Larry Block, and the script was purchased by Universal Pictures, who were looking to produce a teen-aimed horror film after the success of Paramount's Friday the 13th (1980).
The film was shot on location in Miami, Florida.
The Funhouse opened in 814 theaters in the United States on March 13, 1981, and earned $2,765,456 in the opening weekend and grossed $7,886,857 in total.
Critical reception towards the film has been mixed-to-positive and currently holds a rating of 64% on review aggregator website Rotten Tomatoes, signifying "fresh". Tobe Hooper was specifically praised for bringing style and suspense to what could have been a standard early-1980's blood and gore-focused horror film, and his work here was largely responsible for him getting the job of directing the original Poltergeist. Film critic Gene Siskel of the Chicago Tribune liked the film and gave it a positive review.
John Corry of The New York Times gave the film a middling review, noting: "At times, in fact, Mr. Hooper almost persuades us that he is up to more than just gore, creepiness and trauma. He has photographed a carnival - freak show, girly show, grifters and geeks -with a sense of style. The carnival is a small vision of middle-America gone sour, reveling in mean gaiety, and it is not bad while it lasts. Then the monster comes in and drools." Variety's review of the film was similarly mixed: "For all the elegance of photography, [the] pic has nothing in particular up its sleeves, and devotees of director Tobe Hooper’s The Texas Chain Saw Massacre will be particularly disappointed with the almost total lack of shocks and mayhem."
In a review published in People Weekly, the film was praised: "While the director, Tobe (The Texas Chainsaw Massacre) Hooper, ought to have moved on to better things, he is the master of this gore-and-sadism genre... The film features an excruciatingly tense final confrontation. Alex Keneas of Newsday also gave the film a positive review: "The Funhouse doesn't trade on gratuitous and graphic gore, but it doesn't have to. In little ways and using the traditional tried and true devices of the genre ... it skillfully heightens expectations [and] nicely evokes the chiller of a bygone era as it pays respect to Hitchcock and James Whale."
Composer John Beal's mostly orchestral score was praised by critics, and the soundtrack CD later became a collector's item.
A novelization of the screenplay was written by Dean Koontz, under the pseudonym Owen West. As the film production took longer than expected, the book was released before the film. The novel contains a great deal of backstory and characterization which was not used in the movie.
The film was unsuccessfully prosecuted as a video nasty in the UK a few years after its release. Some commentators have questioned its attempted banning, given that the film is fairly tame in comparison to other entries on the list, leading some to suggest it was mistakenly chosen instead of the infamous Last House on Dead End Street, which was released under an alternative title The Fun House and oddly didn't appear on the list. It was released uncut on VHS in 1987 and later on DVD in 1999.
On July 18, 2011 Arrow Video released a new Special Edition Blu-ray Disc in the UK, with the following special features including audio commentary with The Funhouse S/FX wizard Craig Reardon and Jeffrey Reddick (creator of the Final Destination series), audio commentary with producer Derek Power and genre scholar Howard S. Berger, audio commentary with Justin Kerswell, author of Teenage Wasteland and host of the slasher cinema website Hysteria Lives, and author Calum Waddell, Carnage at the Carnival: Tobe Hooper Remembers "The Funhouse", Miles of Mayhem: Acting in Tobe's Funhouse with star Miles Chapin, A Trilogy of Terror: The Make-up Madness of Craig Reardon, the S/FX wizard recollects his collaborations with Tobe Hooper; Eaten Alive, Poltergeist and The Funhouse, Master Class of Horror: Mick Garris, the director of Sleepwalkers and the miniseries adaptation of The Shining reflects on the crimson-covered career of his longtime colleague Tobe Hooper, live Q&A with Tobe Hooper from San Francisco, never-before-seen behind the scenes photographs from the collection of Craig Reardon, the film's trailer, brand new transfer of the film in high definition (1080p), 4-panel reversible sleeve options with original and newly commissioned artwork, double-sided fold-out artwork poster, and a collector's booklet featuring brand-new writing on the film by critic and author Kim Newman.
January 30, 2012 also saw a UK release of The Funhouse by Arrowdrome DVD.
Arrow Video released a Special Edition of The Funhouse on Blu-ray on 26 November, 2012.
Universal Home Entertainment released the film to DVD in the US on September 7, 2004. Shout! Factory is planning a new US DVD, in addition to a US Blu-ray Disc release under their horror sub-label "Scream Factory". Universal also released The Funhouse in a 4-film set, including Phantasm II, Sssssss, and The Serpent and the Rainbow.
Also noted that Gunther was meant to appear in the Boogeymen: The Killer Compilation; however, Gunther didn't make the list. He did appear in the TV commercials of the Boogeymen.