The novel's unusual structure has attracted much attention, and it is often cited as an important example of metafiction. Pale Fire has spawned a wide variety of interpretations and a large body of written criticism. The Nabokov authority Brian Boyd has called it "Nabokov's most perfect novel".
The poem appears with a Foreword, extensive Commentary, and Index by Shade's self-appointed editor, Charles Kinbote, Shade's neighbor in the small college town of New Wye. According to Kinbote, Shade has been murdered. Kinbote has acquired the manuscript, including some variants, and has taken it upon himself to oversee the poem's publication, telling readers that it lacks only one line.
Kinbote's Commentary takes the form of notes to various numbered lines of the poem. Here and in the rest of his critical apparatus, Kinbote explicates the poem surprisingly little. Focusing instead on his own concerns, he divulges pieces of what proves to be the plot, some of which can be connected by following the many cross-references. Thus the narration is highly nonlinear. (The book has been cited by Ted Nelson as an archetypal proto-hypertext.) Kinbote tells his own story, notably including what he thinks of as his friendship with Shade. He also tells the story of Charles Xavier Vseslav, also known as Charles II, "The Beloved," the deposed king of the "distant northern land" of Zembla who picturesquely escaped imprisonment by Soviet-backed revolutionaries. Kinbote repeatedly claims that he inspired the poem by recounting Charles's escape to Shade and that possible allusions to Charles, and to Zembla, can be detected in Shade's poem and especially in rejected drafts. However, no comprehensible reference to Charles is to be found in the poem. A third story told by Kinbote is that of Gradus, an assassin dispatched by the new rulers of Zembla to kill the exiled King Charles. In the last note, to the missing line 1000, Kinbote narrates how Gradus killed Shade by mistake.
The reader soon realizes that Kinbote himself is Charles Xavier, living incognito—or, though Kinbote builds an elaborate picture of Zembla complete with samples of a constructed language, that he is insane and that his identification with Charles is a delusion, as perhaps all of Zembla is.
Nabokov said in an interview that Kinbote committed suicide after finishing the book. The critic Michael Wood has stated, "This is authorial trespassing, and we don't have to pay attention to it, but Brian Boyd has argued that internal evidence points to Kinbote's suicide. One of Kinbote's annotations to Shade's poem (corresponding to line 493) addresses the subject of suicide in some detail.
Some interpreters have noted a secondary reference in the book's title to Hamlet, where the Ghost remarks how the glow-worm "'gins to pale his uneffectual fire" (Act I, scene 5).
Some other early reviews were less decided, praising the book's satire and comedy but noting its difficulty and finding its subject slight or saying that its artistry offers "only a kibitzer's pleasure". MacDonald called the reviews he had seen, other than McCarthy's, "cautiously unfavorable".
Other readers see a story quite different from the apparent narrative. "Shadeans" maintain that John Shade wrote not only the poem, but the commentary as well, having invented his own death and the character of Kinbote as a literary device. According to Boyd, Andrew Field invented the Shadean theory and Julia Bader expanded it; Boyd himself espoused the theory for a time. "Kinboteans", a decidedly smaller group, believe that Kinbote invented the existence of John Shade. Boyd credits the Kinbotean theory to Page Stegner and adds that most of its adherents are newcomers to the book. Some readers see the book as oscillating undecidably between these alternatives, like the Rubin vase (a drawing that may be two profiles or a goblet).
Though a minority of commentators believe or at least accept the possibility that Zembla is as "real" as New Wye, most assume that Zembla, or at least the operetta-quaint and homosexually gratified palace life enjoyed by Charles Xavier before he is overthrown, is imaginary in the context of the story. The name "Zembla" (taken from "Nova Zembla", a former anglicization of Novaya Zemlya) may evoke popular fantasy literature about royalty such as The Prisoner of Zenda, signaling that it is not to be taken literally. As in other of Nabokov's books, however, the fiction is an exaggerated or comically distorted version of his own life as a son of privilege before the Russian Revolution and an exile afterwards, and the central murder has resemblances (emphasized by Priscilla Meyer) to Nabokov's father's murder by an assassin who was trying to kill someone else.
Some readers, starting with Mary McCarthy and including Boyd, Nabokov's annotator Alfred Appel, and D. Barton Johnson, see Charles Kinbote as an alter-ego of the insane Professor V. Botkin, to whose delusions John Shade and the rest of the faculty of Wordsmith College generally condescend. Nabokov himself endorsed this reading, stating in an interview in 1962 (the novel's year of publication) that Pale Fire "is full of plums that I keep hoping somebody will find. For instance, the nasty commentator is not an ex-King of Zembla nor is he professor Kinbote. He is professor Botkin, or Botkine, a Russian and a madman." The novel's intricate structure of teasing cross-references leads readers to this "plum". The Index, supposedly created by Kinbote, features an entry for a "Botkin, V.," describing this Botkin as an "American scholar of Russian descent"—and referring back to a note in the Commentary on line 894 of Shade's poem, in which no such individual is directly mentioned but a character suggests that "Kinbote" is "a kind of anagram of Botkin or Botkine". In this interpretation, the "Gradus" who kills Shade is an American named Jack Grey who wanted to kill Judge Goldsworth, whose house "Pale Fire's" commentator—whatever his "true" name is—is renting. Goldsworth had condemned Grey to an asylum from which he escaped shortly before mistakenly killing Shade, who resembled Goldsworth.
Still other readers de-emphasize any sort of "real story" and may doubt the existence of such a thing. In the interplay of allusions and thematic links, they find a multifaceted image of English literature, criticism, literary idolatry, politics, or some other topic.
The book is also full of references to culture, nature, and literature. Some have been greatly emphasized by critics; others may be trifles. Many feel the book is more enjoyable if the reader deciphers or pursues these references independently.