Made on a mere $15 million budget, with dialogue in Mandarin, Crouching Tiger, Hidden Dragon became an international success. It grossed $128 million dollars in the United States alone, where foreign language films are very rarely embraced by the public. The movie was nominated for numerous awards around the world including The Academy Awards' Best Picture. It won four Academy Awards, including Best Foreign Language Film. It was filmed in Anhui Province, China. The Mandarin title is Wo hu zang long (臥虎藏龍).

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Set in the Qing Dynasty in China (the props, the hair and clothing styles and the appearance of a telescope are all consistent with the period), the story follows two experienced and legendary warriors, Li Mu Bai (Chow Yun-Fat) and Yu Shu Lien (Michelle Yeoh). Both are in love but feel they cannot act on their love. Meanwhile Jen (Zhang Ziyi), who has tasted adventure, yearns for more, and as a secret apprentice to the evil warrior Jade Fox (whom Li has sworn to kill) she has the skills to match any warrior she meets, except Li, who refuses to kill her because he wants to train her as his apprentice. But Jen is headstrong in her powers and maddened by her forbidden love to desert bandit Lo, and she will not accept Li as a master.

The name Crouching Tiger, Hidden Dragon (臥虎藏龍) comes from a Chinese saying that teaches one to conceal one's strengths from others. In the Chinese version of the movie, Lo's name is Xiao Hu which means "little tiger" and Jen's name is Lon Ur which means "little dragon."

The fantasy aspect of the film comes into play whenever the three protagonists fight. They possess seemingly magical[?] powers, literally flying across roofs, running up walls, moving with superhuman speed. These powers are explained in the movie only with the training and secret knowledge of the Wudan school of martial arts. While some viewers found it easy to suspend their disbelief, others feel that the physically impossible actions without a proper explanation make it impossible to enjoy the movie.

Much of the international success of the film was due to the fact that, unlike most Chinese films, this one was supported by Sony Pictures and therefore received marketing typical of Western films.

Despite its international fame, the movie was not well received in China. It was perceived by many as another Wu Xia movie among countless in the past four decades. Members of the Mandarin speaking audience complained that they had to read the Chinese subtitles because the actors' accents were hard to understand. Neither Chow nor Yeoh speaks Mandarin natively.