In Tibet, following the First World War, an American named Lamont Cranston (Alec Baldwin), succumbing to his dark instincts, sets himself up as a warlord and opium kingpin under the alias of Yin-Ko (Mandarin Chinese for "Dark Eagle"). He is abducted by servants of the Tulku (Brady Tsurutani, voiced by Barry Dennen), a holy man who exhibits otherworldly powers and knows Cranston's identity. He offers Cranston a chance to redeem himself and become a force for good. Cranston refuses but is silenced by the Phurba (Frank Welker), a mystical sentient flying dagger. Ultimately, Cranston remains under the tutelage of the Tulku for seven years. In addition to undergoing rigorous physical training, he learns how to hypnotize others, read their minds, and bend their perceptions so that he cannot be seen—except, of course, for his shadow.
Returning to New York City, Cranston resumes his former life as a wealthy playboy. He secretly operates as The Shadow, a vigilante who terrorizes the city's underworld. He recruits some of the people he saves from criminals to act as his agents, providing him with information and specialist knowledge. Cranston's secret identity is endangered upon meeting Margo Lane (Penelope Ann Miller), a socialite who is also telepathic.
Shiwan Khan (John Lone), the Tulku's rogue protégé and murderer whose powers apparently surpass Cranston's, wakes up while in a sarcophagus that once kept his ancestor - the Mongol Empire founder Genghis Khan. He uses hypnosis to make a security guard (Ethan Phillips) shoot himself in the head after the guard refuses to join Khan's army. Khan plans to fulfill his ancestor's goal of world domination. He offers Cranston an alliance, but Cranston refuses. Cranston acquires a rare coin from Khan and learns that it is made of a metal called "bronzium" (an impure form of uranium) that theoretically can generate an atomic explosion. He learns that Margo's father Reinhardt (Ian McKellen), a scientist who works on building an atomic device for the Department of War, has disappeared, and realizes that Khan needs Reinhardt and his invention to build an atomic bomb.
Shiwan Khan hypnotizes Margo and commands her to kill the Shadow. She goes to Cranston's home, but Cranston breaks his hold on her. She realizes that since she was ordered to kill the Shadow and she instinctively went to Cranston's home, that he is the Shadow. Cranston prepares to rescue Margo's father but is thwarted by Khan's henchmen, especially when Reinhardt's assistant Farley Claymore (Tim Curry) allies with Khan. The Shadow discovers the location of Khan's hideout, the luxurious Hotel Monolith, a building in the middle of the city that Khan has rendered invisible. Knowing Reinhardt has completed the bomb under Khan's hypnotic control, The Shadow enters the hotel for a final showdown with Khan.
The Shadow fights his way through the building, and hypnotically influences Claymore to jump from a balcony to his death to prevent him from building another bomb. He finds Khan, but is subdued by the Phurba. The Shadow realizes that only a peaceful mind can truly control the Phurba and he seizes command of the dagger. The Shadow launches it into Khan's torso, creating a lapse in Khan's hypnotic control that frees Reinhardt and restores the hotel's visibility. The Shadow pursues Khan into the bowels of the building, while Margo and Reinhardt disarm the bomb. The Shadow defeats Khan by telekinetically hurling a shard of mirror into a frontal lobe of Khan's skull.
A confused Khan wakes up in a padded cell in a mental hospital, discovering that his powers are now gone. One of the doctors — also an agent of The Shadow — tells Khan that they were able to save his life by removing a part of his brain "that nobody uses", which in reality controlled his psychic abilities. Cranston and Margo begin a serious relationship and join forces to fight crime.
Producer Martin Bregman bought the rights to The Shadow in 1982. Screenwriter David Koepp had listened to The Shadow radio show as a child when CBS radio re-ran it on Sunday nights. He was hired in 1990 to write a new draft and was able to find the right tone that the studio liked. Bregman remembers, “Some of them were light, some of them were darker, and others were supposedly funnier – which they weren’t. It just didn’t work”. Koepp's script relied predominantly on the pulp novels while taking the overall tone from the radio show with the actual plot originated by Koepp himself in consultation with Bregman.
In an attempt to differentiate the film from other superhero films of the time, Koepp focused on “the copy line, ‘Who knows what evil lurks in the hearts of men?’ and wondered how he knew what evil lurks in the hearts of men. And I decided that perhaps it was because he was uncomfortably familiar with the evil in his own heart”. For Koepp, the film then became “a story of guilt and atonement”. He picked Shiwan Khan as the film’s villain because “he was bold and he knew what he was doing – he wanted to conquer the world. That was very simple, maybe a little ambitious, but he knew exactly what he wanted.” He had always been a fan of Alec Baldwin and wrote the script with him in mind: "He has the eyes and the voice; he had so much of what I pictured Cranston being". Koepp also sat in on rehearsals and incorporated a lot of the actor’s humor into the script.
The film was shot on the Universal backlot in Hollywood on five soundstages over 60 days with a five-day mini-unit tour of location shooting, and a week lost when an earthquake destroyed the Hall of Mirrors set. Mulcahy said, “There are a lot of FX in this film, but it’s not a FX film. It’s a character/story-driven film. The FX are part of the story.”
The film's original score was composed by Jerry Goldsmith, who used his at the time signature style of music for big orchestra (supported by a prominent percussion section) and musical effects with the help of instruments and especially synthesizers. Among the leitmotifs of his score are a romantically dark, yet lush heroic melodical main theme for the protagonist, which is accompanied by several secondary themes. For the antagonist, rather than a fully developed theme, Goldsmith used a musical effect in horns and synthesizers imitating a howling sound, a technique that would later echo in his scores for The Edge and The Ghost and the Darkness.
Camille Saint-Saëns's 1872 composition Le Rouet d'Omphale ("Omphale's Spinning Wheel"), which introduced the radio show, is not used in the film's score.
For the album and end credits, Jim Steinman composed the pop-song Original Sin performed by Taylor Dayne, originally appearing on the album Original Sin by the group Pandora's Box, while Diane Warren composed a period-style big-band piece Some Kind of Mystery to be performed in the movie by Sinoa.
The Arista Records label released a soundtrack album in 1994. The soundtrack featured selections from Goldsmith's score and the songs from the film, Original Sin in two different versions.
In 2012, Intrada released a 2-CD package that features the world premiere of the entire soundtrack composed by Jerry Goldsmith and among other bonus tracks also the complete original album cut on the second disc.
The film was meant to be a summer blockbuster and the starting point for a new film franchise with toy, game, and clothing lines. However, the film suffered from competition for its target audience with, among others, The Lion King (during its early run) and The Mask (later on), and it was ultimately a financial disappointment. The film started off strongly, debuting at No. 2, but failed to sustain any momentum, and grossed $32 million domestically, with a worldwide total of $48 million against a budget of $40 million. The planned franchise never materialized.
The film received mostly mixed-to-negative reviews. It holds a 35% rating on the film review aggregator website Rotten Tomatoes from a sample of 46 critics, with the consensus: "Visually impressive, but ultimately forgettable". The more detailed summary described the film as having "impressive" visuals and a story that does not "strike a memorable chord". Entertainment Weekly placed the film on its "21 Worst Comic-Book Movies Ever" list. However, on the Siskel and Ebert syndicated review TV series, noted critic Roger Ebert gave the film a positive review.
Despite its failure, the film has retained a cult following in subsequent years, a result of its video success on VHS, DVD, and Blu-ray, much like two other 1990s pulp/comic adaptations, The Rocketeer and The Phantom.
James Luceno wrote the novelization which went deeper into the events of the film and included many nods to the radio show and the original pulp magazines, most significantly alluding to the fact that The Shadow's true identity was Kent Allard and that 'Lamont Cranston' was just another identity he assumed.
A video game version of The Shadow for the Super NES was developed to tie in with the 1994 film, but after the low box office gross, was never released. However, ROMS are available.
Midway (under the Bally label) released a Shadow-themed pinball machine in 1994. Brian Eddy of Attack From Mars and Medieval Madness fame designed the game. It was his first pinball game design, and it was moderately successful. Dan Forden composed original music for the game.