Roach's future wife Linda Kohanov lauded Dreamtime Return in a 1989 appraisal for CD Review, calling it Roach's "masterpiece" and that Roach "demonstrates that electronic music's greatest potential may lie in bringing our most elusive dreams and ancient memories into focus through potent, highly imaginative soundscapes."
Dreamtime Return helped Roach gain a worldwide reputation. Retrospectively, the album has been described by the Hartford Courants Roger Catlin as "groundbreaking", and by AllMusic as a landmark of "fourth world" music. Reviewing the album's 1998 reissue, Mark Burbey of Alternative Press wrote that Dreamtime Return "remains a landmark recording of extraordinary emotional resonance." It has also been included on a number of lists of the world's best music, including Tom Moon's 1,000 Recordings to Hear Before You Die (2008), which notes that it has come to be regarded as "one of the pivotal works of ambient music."
John Diliberto, host of the ambient music radio program Echoes, commented in 2005 that Dreamtime Return was "a seminal recording that has influenced a generation of musicians", while Hearts of Space presenter Stephen Hill said, "Musically Dreamtime richly deserves its classic status, but Roach also deserves credit for leading electronic musicians out of their sheltered studios and into an active relationship with the landscape, the wider world, and deep cultural history."
After Dreamtime Return was remastered and reissued for its 30th anniversary in 2018, Bryon Hayes from Exclaim! wrote, "Thirty years later, in a period of intense rediscovery of barely remembered classic albums, it's fitting that this iconic gem has been uncovered."