Most of the television cast returned for the film, with the notable exceptions of Lara Flynn Boyle who declined to return as Laura’s best friend Donna Hayward (she was replaced by Moira Kelly), and Sherilyn Fenn due to scheduling conflicts. Also, Kyle MacLachlan, who starred as Special Agent Dale Cooper in the TV series, was reluctant to return so his presence in the film is smaller than originally planned.
Fire Walk with Me was greeted at the Cannes Film Festival with booing from the audience and met with almost unanimously negative reviews in the United States. The film fared poorly in the United States at the box office, partially because it was released almost a year after the television series was canceled (due to a sharp ratings decline in the second season), partially due to its incomprehensibility to the uninitiated and the fact that the film only appeals to a subset of the viewers of the Twin Peaks series. However, it was an overwhelming commercial hit in Japan. The film also disappointed many devotees of the TV series due to its darker tone, lack of humor and absence of a resolution to the series' cliff-hanger ending.
Meanwhile, in Philadelphia, long-lost Agent Phillip Jeffries re-appears, and tells Gordon that he was in a nightmare for two years. As he explains, we see images of the Man from Another Place, BOB, Mrs. Chalfont, and her grandson. Jeffries disappears into thin air, and Agent Dale Cooper is sent to investigate Desmond's disappearance, and sees the words "Let's Rock" (words said by the Man From Another Place in the series) on the windshield of Desmond's car. The clues to Teresa Banks' murder have led to a dead end.
One year later in Twin Peaks, Laura Palmer and Donna Hayward go to school, where Laura takes cocaine and kisses James Hurley. After school, Laura talks with Donna about the difference between Bobby Briggs and James Hurley. Laura realizes that there are pages missing from her secret diary, and goes to tell Harold Smith about the pages, saying that BOB did it, and getting mad at Harold for not believing in BOB. Laura gives Harold her diary.
Meanwhile, Agent Cooper tells fellow FBI agent Albert Rosenfield that he believes the killer will strike again. During her Meals on Wheels rounds, Laura sees Mrs. Chalfont and her grandson. Mrs. Chalfont gives Laura a painting, and her grandson informs Laura that the "man behind the mask" is in Laura's room. Laura lets Shelly deliver the remaining Meals on Wheels and returns home, where she sees BOB – as Laura rushes outside in terror, she sees her father Leland emerge from the house.
When the Palmer family is about to eat, Leland menaces Laura about her dirty hands, and questions her about her "lovers." Later, about to go to bed, Laura hangs the painting she got from Mrs. Chalfont. She dreams about Cooper entering the Black Lodge, and the Man from Another Place telling Cooper that he sounds like a beeping noise. The Man from Another Place shows Cooper the ring that Teresa Banks had, and Cooper tells Laura not to take the ring. Laura wakes up to find Annie Blackburn next to her in bed, and Annie tells Laura that "the good Dale" (Cooper) is trapped in the Black Lodge, that he can't leave, and that she should write it in her diary. Laura awakens to find the ring in her hand. Meanwhile, Bobby, Leo, and Jacques Renault discuss drug scores.
Laura is ready to go to the Bang Bang Bar when Donna tells her of her wish to accompany her, but Laura says she's not invited. As Laura is about to enter the bar, she encounters the Log Lady. Inside the bar, Jacques introduces Laura to two men. The group is about to leave for the Pink Room to have sex, but Donna shows up and wants to come too; impressed by her "audition" kiss, they let her. Within the Pink Room, Laura discusses Teresa Banks' murder with Ronette Pulaski, then has group sex with the men. Laura saves Donna from drugged rape, and takes her home.
The next morning, Laura tells Donna that she doesn't want Donna to become like her. Leland arrives, and takes Laura home. On the way home, MIKE (the one-armed man) shouts madly at Leland and Laura, accusing Leland of stealing his "corn," and showing Laura Teresa's ring.
Leland pulls into a gas station parking lot to gather his wits, then recalls his affair with Teresa, and her murder at his hands. Laura realizes that the ring she saw was the same one from her dream. The next night, Laura and Bobby take cocaine in the woods, and Jacques sends a drug messenger carrying an enormous amount of cocaine. The messenger takes out a gun, but Bobby shoots him, and tries to bury him as Laura laughs maniacally in drunken hysteria.
The next morning, James is worried about Laura taking too many drugs. That night, BOB comes through Laura's window and begins raping her. She realizes that BOB is Leland, and warns Leland away from her the next morning. Upset over the realization that her father is actually BOB, and strung out on cocaine, Laura can't concentrate at school. Later, Laura refuses sex with Bobby, and he finally realizes that Laura was using him to get the cocaine. The angel in Laura's painting disappears.
James and Laura go to the woods and start to make out, but she tells James "his Laura" is gone. Screaming that she loves him, Laura runs away from James into the woods. Laura meets Ronette, Jacques, and Leo, and they hold an orgy in Jacques' cabin as Leland watches from outside. Jacques wants to have harder sex, and ties Laura up. Leland attacks Jacques outside, and Leo flees in panic; Leland takes Laura and Ronette, both bound, to the train car.
Meanwhile, MIKE (the one-armed man) realizes that BOB/Leland is about to kill again, and chases after him. BOB/Leland takes a mirror, and says he'll kill Laura if she won't let him inside her. Ronette escapes the train car as MIKE drops Teresa's ring. Laura takes the ring, preventing BOB from going inside her. Angered that he can't enter her anymore, he starts brutally stabbing her to death.
BOB/Leland dumps Laura's body in the lake. As her corpse drifts away, BOB/Leland enters the Black Lodge, where he encounters MIKE, the one-armed man, and the Man from Another Place. They tell BOB that they want their garmonbozia ("pain and sorrow"). BOB returns it in the form of blood. As Laura's body is found, she enters the Black Lodge. She realizes that Agent Cooper is by her side, and that her angel is guarding her.
The film was made without the Twin Peaks series regulars Lara Flynn Boyle and Sherilyn Fenn. At the time, the absence of these actresses was attributed to scheduling conflicts, but in a 1995 interview, Fenn revealed that the real reason was that she "was extremely disappointed in the way the second season got off track. As far as Fire Walk with Me, it was something that I chose not to be a part of." Fenn's character was cut from the script and Boyle was recast with Moira Kelly. MacLachlan's reluctance was also caused by the decline of quality in the second season of the show; he said "David and Mark [Frost] were only around for the first season... I think we all felt a little abandoned. So I was fairly resentful when the film, Fire Walk with Me, came around."Although he agreed to be in the film, MacLachlan wanted a smaller role, forcing Lynch and co-writer Robert Engels to re-write the screenplay so that the Teresa Banks murder was investigated by Agent Chester Desmond and not by Cooper as originally planned. MacLachlan ended up working only five days on the movie.
Another missing figure from Twin Peaks was co-creator Mark Frost. The relationship between Lynch and Frost had become strained during the second season and after the series ended. Frost went on to direct his own movie, Storyville (1992), and was unable to collaborate with Lynch on Fire Walk with Me.
Filming began on September 5, 1991 in Snoqualmie, Washington and lasted until October of the same year, with four weeks dedicated to locations in Washington, and another four weeks of interiors and additional locations in Los Angeles, California. When shooting went over schedule in Seattle, Washington, Laura's death in the train car had to be shot in Los Angeles on soundstage during the last day of shooting, October 31.
US distributor New Line Cinema released the film in America on August 28, 1992. It grossed a total of USD $1.8 million in 691 theaters in its opening weekend and went on to gross a total of $4.1 million in North America.
Fire Walk With Me was released with no advance press screenings which did not endear it with critics. The film flopped in the United States, partially because it was released almost a year after the television series was canceled (due to a sharp ratings decline in the second season) and partially due to its incomprehensibility to the uninitiated. Janet Maslin in her review for the New York Times wrote, "Mr. Lynch’s taste for brain-dead grotesque has lost its novelty". Fellow Times film critic Vincent Canby concurred, "It's not the worst movie ever made; it just seems to be". In his review for Variety magazine, Todd McCarthy said, "that Laura Palmer, after all the talk, is not a very interesting or compelling character and long before the climax has become a tiresome teenager". USA Today gave the film one-and-a-half stars out of four, calling it, "a morbidly joyless affair". However, Kim Newman gave the film one of its rare positive reviews in Sight & Sound magazine. "The film’s many moments of horror . . . demonstrate just how tidy, conventional and domesticated the generic horror movie of the 1980s and 1990s has become". Mark Kermode has hailed the film as Lynch's "masterpiece". The film currently has a 59 percent "fresh" rating at Rotten Tomatoes.
According to the film's cinematographer, Ron Garcia, the film was very popular in Japan — in particular, with women, as Martha Nochimson wrote in her book on Lynch's movies, "He surmises that the enthusiasm of the Japanese women comes from a gratification of seeing in Laura some acknowledgment of their suffering in a repressive society". Released under the title, Twin Peaks: The Last Seven Days of Laura Palmer, it was greeted with long lines of moviegoers at theaters. In retrospect, Lynch felt bad that the film "did no business and that a lot of people hate the film. I really like the film. But it had a lot of baggage with it". The film’s editor Mary Sweeney said, "They so badly wanted it to be like the T.V. show, and it wasn’t. It was a David Lynch feature. And people were very angry about it. They felt betrayed". Lee is very proud of the film, saying, "I have had many people, victims of incest, approach me since the film was released, so glad that it had been made because it helped them to release a lot".
After Fire Walk with Me was released, Lynch reportedly planned a second prequel, possibly utilizing footage edited out of the first movie. However, in a 2001 interview he said that the Twin Peaks franchise is “dead as a doornail”.
In 2007, dvdrama.com reported that French distributor company MK2 was in final negotiations with Lynch about a new two-disc Special Edition that would have included 17 deleted scenes hand-picked by the director himself. It was tentatively scheduled for release date on October 17th, 2007, but since then MK2 has opted instead to re-release a bare-bones edition of Fire Walk with Me, citing that a new version including the deleted scenes has been put on hold indefinitely.
A Blu-Ray release of the film has been slated for 2009.