In one of Gary Larson's "The Far Side" comic strips, captioned "Hell's Video Store", the entire store is stocked with nothing but copies of this film. Larson later apologized, saying "When I drew the above cartoon, I had not actually seen 'Ishtar'. Years later, I saw it on an airplane, and was stunned at what was happening to me: I was actually being entertained. Sure, maybe it's not the greatest film ever made, but my cartoon was way off the mark. There are so many cartoons for which I should probably write an apology, but this is the only one which compels me to do so."
As of 2015, this is the last movie to be directed by Elaine May. The film's extreme failure kept her away from the Hollywood scene until she wrote the screenplay for The Birdcage (1996), which was directed by her old comedy partner Mike Nichols. Two years later, she re-teamed with Nichols to write Primary Colors (1998), for which she was nominated for an Oscar.
Warren Beatty and Elaine May quarreled and argued quite a bit off camera and especially in the editing room. Dustin Hoffman would serve as the mediator between the two of them. Beatty would also take sides against May in disagreements between her and director of photography Vittorio Storaro. At one point, Beatty and May had an argument with May telling Beatty, "You want this scene your way? You shoot it!", and May would abandon the set for long periods of time. Beatty then reported the incident to the Columbia Pictures production representative, who then offered to fire May as director of the film on Beatty's behalf as producer of the film, but Beatty did not want to take on responsibilities of directing the rest of the film himself had May been fired, and did not want to contradict himself as the whole point of the film was to give May the chance she never really had to show her talents as director. Beatty told Columbia, if they were to fire May, he and Hoffman would abandon the film entirely as well. In the end, May stayed on-board and ended up directing the entire film.
The idea for this film came about because Warren Beatty felt indebted to Elaine May who wrote the screenplay for his hit movie Le ciel peut attendre (1978), and she also did an uncredited screenplay write on his Oscar-winning Reds (1981). Beatty wanted to give May a chance to make a film that she was artistically and commercially capable of making and offered to produce and be the lead actor in it. May presented the idea to Beatty about a Hope-Crosby Road to... type picture, and wanted to get another co-star, possibly Dustin Hoffman to sign on. Hoffman originally turned the movie down because of "misgivings", but eventually changed his mind after meeting with Beatty and his friend and confidant Murray Schisgal. Hoffman, like Beatty was also indebted to May, as she did an uncredited writing job for his hit film Tootsie (1982).
Martin Scorsese, Quentin Tarantino, and Edgar Wright are fans of the film. Scorsese called it one of his favorite movies.