Production notes

Brian Froud says that Labyrinth was first discussed between himself and director Jim Henson. Both agreed to work on another project together, and Froud suggested that the film should feature goblins. On the same journey, Froud "pictured a baby surrounded by goblins" and this strong visual image, along with Froud's insight that goblins traditionally steal babies, provided the basis for the film's plot. Henson discussed the film's origins to say that he and Froud "wanted to do a lighter weight picture, with more of a sense of comedy since The Dark Crystal got kind of heavy, heavier than we had intended. Now, I wanted to do a film with the characters having more personality and interacting more". Labyrinth was being seriously discussed as early as March 1983, when Henson held a meeting with Froud and children's author Dennis Lee. Lee was tasked with writing a novella on which a script could be based, submitting it at the end of 1983. Henson approached Terry Jones to write the film's script, as "his daughter Lisa had just read Erik the Viking and suggested that he try me as screenwriter". Jones was given Dennis Lee's novella to use as a basis for his script but later told Empire that Lee had produced an unfinished "poetic novella" that he "didn't really get on with". In light of this, Jones "discarded it and sat down with Brian [Froud]'s drawings and sifted through them and found the ones that I really liked, and started creating the story from them". Jones is credited with writing the screenplay, while the shooting script was actually a collaborative effort that featured contributions from Henson, George Lucas, Laura Phillips, and Elaine May. Jones has said that the finished film differs greatly from his original vision. Jones states that, "I didn't feel that it was very much mine. I always felt it fell between two stories, Jim wanted it to be one thing and I wanted it to be about something else." Jones has said that his version of the script was "about the world, and about people who are more interested in manipulating the world than actually baring themselves at all". In Jones' original script, Jareth merely seems "all powerful to begin with" and is actually using the Labyrinth to "keep people from getting to his heart". Jones has said that Bowie's involvement in the project had a significant impact on the direction taken with the film. Jones had originally intended for the audience not to see the centre of the Labyrinth, prior to Sarah's reaching it, as he felt that, in doing so, it robbed the film of a significant "hook". Henson decided that he wanted Jareth to sing and appear throughout the film, which was something Jones considered the "wrong" decision, with the thought of Bowie starring in the film in mind. Despite his misgivings, Jones rewrote the script to allow for performing songs throughout the film. This draft of the script "went away for about a year". During this time, it was redrafted first by Phillips and subsequently by Lucas. An early draft of the script attributed to Jones and Phillips is markedly different from the finished film. The early script has Jareth enter Sarah's house in the guise of Robin Zakar, the author of a play she is due to perform in. Sarah does not wish her brother would be taken away by the goblins, and Jareth snatches him away against her will. Jareth is overtly villainous in this draft of the script. His final confrontation with Sarah tells her that he would "much rather have a Queen" than "a little goblin prince". The early script ends with Sarah kicking Jareth in disgust, and her blows transform him into a powerless, sniveling goblin. In the extensive junkyard scene, Jareth operates the Junk Lady as a puppet, whereas, in the film, she is autonomous. There is actually a pub or bar in the Labyrinth where the Man with Hat and Hoggle gather, and the river Lethe in Greek myth is mentioned. As well as this, the ballroom scene features extensive dialogue between Jareth and Sarah, whereas, in the film, there is none (though there is in the novelization by A. C. H. Smith), and the goings-on with the dancers in the ballroom are more overtly sexualised. The redrafted script was sent to Bowie, who found that it lacked humour and considered withdrawing his involvement in the project as a result. To ensure Bowie's involvement, Henson asked Jones to "do a bit more" to the script to make it more humorous. May met with Henson in several months, prior to the start of filming in April 1985, and was asked to polish the script. May's changes "humanised the characters" and pleased Henson to the extent that they were incorporated into the film's shooting script. At least 25 treatments and scripts were drafted for Labyrinth between 1983 and 1985. The film's shooting script was only ready shortly before filming began.

Henson intended the protagonist of the film, at different stages of its development, as a king whose baby had been put under an enchantment, a princess from a fantasy world, and a young girl from Victorian England. They made the lead a teenage girl from contemporary America to make the film more commercial. Henson noted that he wished to "make the idea of taking responsibility for one's life, which is one of the neat realisations a teenager experiences, a central thought of the film". Auditions for the lead role of Sarah began in England in April 1984. Helena Bonham Carter auditioned for the role but was passed over in favour of an American actress. Monthly auditions were held in the United States until January 1985, and Jane Krakowski, Yasmine Bleeth, Sarah Jessica Parker, Marisa Tomei, Laura Dern, Claudia Wells, Ally Sheedy, Maddie Corman, and Mia Sara all auditioned for the role. Out of these, Krakowski, Sheedy, and Corman were considered the top candidates. Fourteen-year-old actress Jennifer Connelly "won Jim [Henson] over", and he cast her within a week. Henson states that Connelly was chosen, as she "could act that kind of dawn-twilight time between childhood and womanhood". Connelly moved to England in February 1985, in advance of the film's rehearsals, which began in March. Connelly discussed her understanding of her role with Elle magazine that the film is about "a young girl growing out of her childhood, who is just now becoming aware of the responsibilities that come with growing up". The character of Jareth also underwent some significant developments during the early stages of preproduction. Henson states that he originally intended him as another puppet creature in the same vein as his goblin subjects. Henson decided that the role should be filled by a live actor and initially considered offering it to Simon MacCorkindale or Kevin Kline. Henson eventually wanted a big, charismatic star "who could change the film's whole musical style" to play the Goblin King and sought a contemporary musician for the role, considering Sting, Prince, Mick Jagger, and Michael Jackson before choosing Bowie. Henson stated that, "I wanted to put two characters of flesh and bone in the middle of all these artificial creatures, and David Bowie embodies a certain maturity, with his sexuality, his disturbing aspect, all sorts of things that characterise the adult world." Henson met David Bowie in the summer of 1983 to seek his involvement, as Bowie was in the United States for his Serious Moonlight Tour at the time. Henson pursued Bowie for the role of Jareth and sent him each revised draft of the film's script for his comments. During a meeting that took place on June 18, 1984, Henson showed Bowie The Dark Crystal and a selection of Brian Froud's concept drawings to pique his interest in the project. Bowie formally agreed to take part on February 15, 1985, several months before filming began. Bowie discussed why he was involved in the film, stating that, "I'd always wanted to be involved in the music-writing aspect of a movie that would appeal to children of all ages, as well as everyone else, and I must say that Jim gave me a completely free hand with it. The script itself was terribly amusing without being vicious or spiteful or bloody, and it had a lot more heart in it than many other special effects movies, so I was pretty hooked from the beginning." Gates McFadden was originally offered the role of Sarah's mother by Henson, and she signed up to do the choreography as well, but she was not allowed to act in the film and had to accept the choreography role alone due to union rules. She is credited in the film as Cheryl McFadden (her first name), as she usually is when being credited for choreography work. She said that, "Even though that was the reason I took the job and had, for two years, been thinking that was what was going to happen. They would not allow us."

The team that worked on Labyrinth was largely assembled from talent who had been involved in various other projects with The Jim Henson Company. Veteran performers Dave Goelz and Steve Whitmire operated various puppets in the film, along with Karen Prell, Ron Mueck, Rob Mills, and Kathryn Mullen (as various goblins), who had all worked with Henson on Fraggle Rock. Kevin Clash, a puppeteer from Sesame Street best known for performing the character Elmo, also worked on the film as various creatures, as did Frank Oz, who performed briefly as the Wiseman (while also directing Little Shop of Horrors around that time). Members of Henson's family also worked on the production, including son Brian (the voice and chief puppeteer for Hoggle) and daughter Cheryl (who assisted on one of the Fireys and is also credited for building the characters). Newcomers working on the production included puppeteers Anthony Asbury, Angie Passmore, Nigel Plaskitt, and Mak Wilson (the latter three of whom are credited for performing goblins) who had previously worked on the satirical puppet show Spitting Image, while a few others, including David Barclay, David Greenaway, Toby Philpott, and Mike Quinn, were carried over from The Dark Crystal. Other goblin puppeteers included David Rudman (also known for his work on Sesame Street), Robin Stevens, Don Austen, Robert Tygner, and, briefly, Jim Henson himself. Louise Gold, a veteran Muppet performer who had gotten her start on The Muppet Show, cameos in the film as a masked ballroom dancer during the "As the World Falls Down" sequence, while Kenny Baker and Warwick Davis, best known as the performers of Star Wars' R2-D2 and Wicket W. Warrick respectively, were credited as some of the "Goblin Corps". "Ambrosius", Sir Didymus' canine steed, was voiced by Percy Edwards, who had previously supplied the voice of Fizzgig in The Dark Crystal. Ronnie Le Drew, best known for playing Zippy on the ITV Children's Programme Rainbow also worked on the film.

Principal photography began on April 15, 1985, at Elstree Studios. Labyrinth took five months to film and was a complicated shoot due to the various puppets and animatronic creatures involved. In the making-of documentary Inside the Labyrinth, Henson stated that Jim Henson's Creature Shop had been building the puppets and characters required for around a year and a half, prior to shooting, but "everything came together in the last couple weeks". Henson noted that, "even if you have the characters together, the puppeteers start working with them, they find problems or they try to figure out what they're going to do with these characters". Each of the film's key puppets required a small team of puppeteers to operate it, but Hoggle was the most complex puppet of the production. Shari Weiser was inside the costume, while Hoggle's face was radio-controlled by Brian Henson (who also provided the character's voice and performed a few goblins) and three additional puppeteers. Brian Henson stated that Weiser "does all the body movement and her head is inside the head. However, the jaw is not connected to her jaw. Nothing that the face is doing has any connection with what she's doing with her face. The other four members of the crew are all radio crew, myself included," in the Inside the Labyrinth documentary. Brian Henson also said of the challenges involved with performing Hoggle that, "five performers trying to get one character out of one puppet was a very tough thing. Basically, what it takes is a lot of rehearsing and getting to know each other." The film's big, ogre-like monster Ludo, whose original build weighed over 100 pounds (45 kg), was similarly challenging. It would have been too exhausting for performer Ron Mueck to inhabit the 75 pounds (34 kg) suit for all of his scenes, so Henson decided to have Mueck and Rob Mills exchange performances inside Ludo, as they were the same size and had a similar body shape. At the early stages of filming, stars Connelly and Bowie found it difficult to interact naturally with the puppets they shared most of their scenes with. Bowie said that, "I had some initial problems working with Hoggle and the rest, because, for one thing, what they say doesn't come from their mouths, but from the side of the set or from behind you." Connelly remarked that, "it was a bit strange [working almost exclusively with puppets in the film], but I think both Dave [Bowie] and I got over that and just took it as a challenge to work with these puppets, and, by the end of the film, it wasn't a challenge anymore. They were there, and they were their characters." The film required large and ambitious sets constructed, from the Shaft of Hands to the rambling, distorted Goblin City where the film's climactic battle takes place. The Shaft of Hands sequence was filmed on a rig that was 30 feet (9.1 m) high, with a camera mounted on a forty-foot vertical camera track. Many grey, scaly hands integral to the scene were actually 150 live hands supplied by 75 performers and 200 foam-rubber hands. Connelly was strapped into a harness when shooting the scene and spent time between takes suspended midway up the shaft. The set of the Goblin City was built on Stage 6 at Elstree Studios near London and required the largest panoramic back cloth ever made. Production designer Elliot Scott states that the biggest challenge he faced was building the forest Sarah and her party pass through on their way to Jareth's Castle. The film's production notes state that, "the entire forest required 120 truckloads of tree branches, 1,200 turfs of grass, 850 pounds (390 kg) of dried leaves, 133 bags of lichen, and 35 bundles of mossy old man's beard". Most filming was conducted at Elstree Studios, while a small amount of location shooting was carried out in England and the US. The park seen at the start of the film is part of the West Wycombe Park estate in Buckinghamshire, England. The scenes of Sarah running back home were filmed in various towns in New York State, namely Upper Nyack, Piermont, and Haverstraw. Shooting wrapped on September 8, 1985.

Most of the visual effects on Labyrinth were achieved in-camera with several notable exceptions. The most prominent of these post-production effects was the computer-generated owl that appears at the opening of the film. The sequence was created by animators Larry Yaeger and Bill Kroyer at Digital Productions and marked the first use of a realistic CGI animal in a film. The owl head maquette was rescued from a skip when the animation company Omnibus went bankrupt in 1987. The scene where Sarah encounters the Fire Gang was altered in post-production, as it had been filmed against black velvet cloth to disguise the puppeteers, and a new forest background was added behind. Jim Henson was unhappy with the compositing of the finished scene, although he considered the puppetry featured in it worthy including them. Henson received help editing the film from executive producer George Lucas. Henson states that, "When we hit the editing, I did the first cut, and then George was heavily involved on bringing it to the final cut. After that, I took it over again and did the next few months of post-production and audio." Henson went on to say that, "When you edit a film with somebody else you have to compromise. I always want to go one way, and George goes another way, but we each took turns trading off, giving and taking. George tends to be very action-oriented and he cuts dialogue quite tight. I tend to cut looser, and go for more lyrical pauses, which can slow the story. [In doing] so, I loosen up his tightness, and he tightens my looseness."

The soundtrack album features Trevor Jones' score, which is split into six tracks for the soundtrack: "Into the Labyrinth", "Sarah", "Hallucination", "The Goblin Battle", "Thirteen O'Clock", and "Home at Last". Bowie recorded five songs for the film: "Underground", "Magic Dance", "Chilly Down", "As the World Falls Down", and "Within You". "Underground" is featured on the soundtrack twice. The first version of "Underground" is played in an edited version that was played over the film's opening sequence, while the second version is played full. "Underground" was released in various territories as a single and, in certain markets, was also released in an instrumental version and an extended dance mix. "Magic Dance" was released as a 12" single in the US. "As the World Falls Down" was initially slated for release as a follow-up single to "Underground" at Christmas in 1986, but this plan did not materialise. Bowie did not perform the lead vocals on "Chilly Down", which was performed by Charles Augins, Richard Bodkin, Kevin Clash, and Danny John-Jules, the actors who voiced the "Firey" creatures in the film. A demo of "Chilly Down" under its original title "Wild Things", which was performed by Bowie, was leaked in 2016 by Danny John-Jules shortly after Bowie's death. Steve Barron produced promotional music videos for "Underground" and "As the World Falls Down". The music video for "Underground" features Bowie as a nightclub singer who stumbles upon the Labyrinth encountering many of the creatures seen in the film. The clip for "As the World Falls Down" integrates clips from the film. This video uses them, along with black and white shots of Bowie performing the song in an elegant room. Both were released on the 1993 VHS tape Bowie – The Video Collection and the 2002 two-disc DVD set Best of Bowie. In 2017, Capitol Studios announced a reissue of the soundtrack on a vinyl record. This included all five original songs by David Bowie, along with Trevor Jones' score.

Labyrinth opened at number eight at the US box office with $3,549,243 from 1,141 theaters, which placed it behind The Karate Kid Part II, Back to School, Legal Eagles, Ruthless People, Running Scared, Top Gun, and Ferris Bueller's Day Off. In its next weekend at the box office, the film dropped to number 13 in the charts, only earning $1,836,177. By the end of its run in US cinemas, the film had grossed $12,729,917, just over half of its $25 million budget. The film grossed $9 million in Japan during the summer. In December, the film opened in Europe, opening at number one at the UK box office. It was the highest-grossing film over the Christmas period in the UK, with a gross of $4.5 million in its first month, three times more than its competitors. It was also the highest-grossing film for the period in Spain, Bolivia, and Venezuela. By January 1987, it had grossed $7.5 million altogether from Australia, Brazil, Central America, Germany, Holland, Italy, Mexico, and Spain, for a worldwide gross of over $34 million at that time.

Labyrinth received mixed to positive reviews from critics. On the review aggregator website Rotten Tomatoes, the film holds an approval rating of 63% based on 128 reviews, with an average rating of 6.5/10. The website's critics consensus reads, "While it's arguably more interesting on a visual level, Labyrinth provides further proof of director Jim Henson's boundless imagination." Metacritic, which uses a weighted average, assigned the film a score of 50 out of 100, based on 10 critics, indicating "mixed or average" reviews. Audiences polled by CinemaScore gave the film an average grade of "B" on an A+ to F scale. Roger Ebert acknowledged that Labyrinth was made with "infinite care and pains", and he gave the film two stars out of four, as he felt that the film "never really comes alive." Ebert said that, as the film was set in an "arbitrary world", none of the events in it had any consequences, robbing the film of any dramatic tension. Gene Siskel's review of Labyrinth for the Chicago Tribune was highly negative, and he referred to it as an "awful" film with a "pathetic story", "much too complicated plot", and "visually ugly style." Siskel objected to the film's "violent" plot, writing that, "the sight of a baby in peril is one of sleaziest gimmicks a film can employ to gain our attention, but Henson does it." Other critics were more positive. Kathryn Buxton of The Palm Beach Post found that it had "excitement and thrills enough for audiences of all ages, as well as a fun and sometimes slightly naughty sense of humor." Roger Hurlburt of the Sun-Sentinel called Labyrinth "a fantasy fan's gourmet delight", writing that "though plot aspects are obviously borrowed from other fantasy stories – Cinderella, Snow White and the fairy tale classics, events are served in unique form." Bruce Bailey of The Montreal Gazette admired the film's script, stating that, "Terry Jones has drawn on his dry wit and bizarre imagination and come up with a script that transforms these essentially familiar elements and plot structures into something that fairly throbs with new life." Bailey was also impressed by the film's depth, writing that, "adults will have the additional advantage of appreciating the story as a coming-of-age parable." Several critics noted the film's subtext and found it successful to varying degrees. Saw Tek Meng of the New Straits Times acknowledged that "Sarah's experiences in the labyrinth are symbolic of her transition from child to woman" but ultimately found the film "too linear" for its latent themes to come through. The New York Times' Nina Darnton compared the film's tone to the writings of E. T. A. Hoffmann, stating that Hoffman's The Nutcracker "is also about the voyage to womanhood, including the hint of sexual awakening, which Sarah experiences too in the presence of a goblin king." Darnton enjoyed the film and considered it more successful than Henson's previous collaboration with Brian Froud, The Dark Crystal. Colin Greenland reviewed Labyrinth for White Dwarf #85, stating that, "Like Time Bandits, Labyrinth is the story of a child trying to negotiate a dreamlike otherworld where logic is not all that it should be, and so it also borrows lavishly from The Princess and the Goblin, Alice in Wonderland, The Wizard of Oz, and Where the Wild Things Are. A couple of scenes along the quest are truly eerie. Others are doggedly sentimental." Lynn Minton in Parade opined that "what [Labyrinth] lacks in story and memorable music it makes up for, in part, with amusing special effects, loveable and funny "people" and an emotionally satisfying ending." Connelly's portrayal of Sarah polarised critics and received strong criticism from some reviewers. Los Angeles Daily News critic Kirk Honeycutt referred to Connelly as "a bland and minimally talented young actress." Jon Marlowe wrote for The Miami News, stating that, "Connelly is simply the wrong person for the right job. She has a squeaky voice that begins to grate on you; when she cries, you can see the onions in her eyes." Hal Lipper of the St. Petersburg Times felt contrary to these negative views and praised her acting, saying that, "Connelly makes the entire experience seem real. She acts so naturally around the puppets that you begin to believe in their life-like qualities." Bowie's performance was variously lauded and derided. In his largely positive review of the film for Time, Richard Corliss praised him as "charismatic" referring to his character as a "Kabuki sorcerer who offers his ravishing young antagonist the gilded perks of adult servitude." Bruce Bailey enjoyed Bowie's performance, writing that, "the casting of Bowie can't be faulted on any count. He has just the right look for a creature who's the object of both loathing and secret desire." In a largely critical review, Hal Lipper found that, "Bowie forgoes acting, preferring to prance around his lair while staring solemnly into the camera. He's not exactly wooden. Plastic might be a more accurate description." Henson came "the closest I've seen him to turning in on himself and getting quite depressed" following the film's mixed reception, his son Brian told Life magazine. It was the last feature film directed by Henson before his death in 1990. Labyrinth has been re-evaluated by several notable publications after Henson's death. A review from 2000 in Empire magazine called the film "a fabulous fantasy" and wrote that, "David Bowie cuts a spooky enough figure in that fright wig to fit right in with this extraordinary menagerie of Goth Muppets. And Jennifer Connelly, still in the flush of youth, makes for an appealingly together kind of heroine." Michael Wilmington described Labyrinth as "dazzling", writing that it is "a real masterpiece of puppetry and special effects, an absolutely gorgeous children's fantasy movie", for the Chicago Tribune in 2007. In 2010, Total Film ran a feature called "Why We Love Labyrinth", which described Labyrinth as a "hyper-real, vibrant daydream, Labyrinth's main strength lies in its fairytale roots which give the fantastical story a platform from which to launch into some deliriously outlandish scenarios." In their February 2012 issue, Empire featured a four-page spread on Labyrinth as part of their Muppet Special. In retrospective reviews, Labyrinth has been celebrated for its imaginative visual world, emotional depth, and enduring impact on fantasy cinema.

Labyrinth was nominated at the British Academy Film Awards for Best Special Visual Effects and received two Saturn Award nominations for Best Fantasy Film and Best Costumes. The film was also nominated for the Hugo Award for Best Dramatic Presentation. In 2008, the American Film Institute nominated Labyrinth for inclusion on its Top 10 Fantasy Films list. Labyrinth is ranked 72nd on Empire's "The 80 best '80s movies" and 26th on Time Out's "The 50 best fantasy movies". In 2019, The Daily Telegraph named it as one of "The 77 best kids' films of all time".

Despite its poor performance at the American box office, Labyrinth was a success on home video and later on DVD. David Bowie told an interviewer in 1992 that, "every Christmas a new flock of children comes up to me and says, 'Oh! you're the one who's in Labyrinth!'" In 1997, Jennifer Connelly said that, "I still get recognized for Labyrinth by little girls in the weirdest places. I can't believe they still recognize me from that movie. It's on TV all the time and I guess I pretty much look the same." Labyrinth has become a cult film. Brian Henson remembered his father Jim Henson as being aware that Labyrinth and The Dark Crystal both had cult followings by the time of his death in 1990, saying that "he was able to see all that and know that it was appreciated". Academic Andrea Wright wrote that Labyrinth has managed to maintain audience popularity long after its initial release to a greater extent than The Dark Crystal. Since 1997, an annual two-day event called the "Labyrinth of Jareth Masquerade Ball", in which revelers attend dressed in costumes inspired by the film, has been held in various locations, including San Diego, Hollywood, and Los Angeles. Labyrinth has developed a significant internet fan following since the early 1990s, and, as of 2021, FanFiction.Net hosts more than 10,000 stories in its Labyrinth section. The strong DVD sales of Labyrinth prompted rights-holders the Jim Henson Company and Sony Pictures to look into making a sequel, and Curse of the Goblin King was briefly used as a placeholder title. However, the decision was ultimately taken to avoid making a direct sequel and instead produce a fantasy film with a similar atmosphere. Fantasy author Neil Gaiman and artist Dave McKean were called in to write and direct a film similar in spirit to Labyrinth, and MirrorMask was ultimately released in selected theaters in 2005 after premiering at the Sundance Film Festival. On January 22, 2016, Sony Pictures announced that a reboot is in development with Lisa Henson as producer and Nicole Perlman attached as the screenwriter. However, on January 25, Perlman confirmed on Twitter that, while she is working on a Labyrinth project with the Jim Henson Company, it is not a remake or reboot. Perlman also discussed the timing of the rumors in conjunction with David Bowie's death and said that, "Henson Co & I started talking in late 2014, so the timing of these rumors is so upsetting. I would never seek to profit from Bowie's death."