Barry Diller of Paramount said that the film "on no level is as good as the first. The quality isn't there."
Jim Jacobs described it at the time as "awful ... the pits." In an interview 27 years later, Jacobs noted that Grease 2 "still brings a brief frown to his face."
During an appearance for Rotten Tomatoes to promote the film Tick, Tick... Boom!, actor Andrew Garfield cited the film as one of his five favorite musicals, calling it "great".
Accolades
Pfeiffer was nominated for a 1982 Young Artist Award in the category of Best Young Motion Picture Actress. Grease 2 was nominated for a 1982 Young Artist Award in the cateogry for Best Family Feature: Animated, Musical or Fantasy.
The film was nominated for a Stinkers Bad Movie Awards for Worst Picture. Later on, the Stinkers would unveil their picks for the 100 worst films of the 20th century with their "100 Years, 100 Stinkers" list. Grease 2 ranked in the listed bottom 20 at #13.
The film was given a special screening at the 2021 online TCM Festival.
Home media
Grease 2 was released in the US on VHS and Betamax by Paramount Home Video in November 3, 1982 (with original film poster artwork on the cover), 1990 (Double Box Set of Grease and Grease 2) with modified VHS cover for Grease 2, December 7, 1992, 1993, the last VHS release was on June 23, 1998 (with modified VHS cover upclose view of Maxwell Caulfield and Michelle Pfeiffer, simular to Grease posters and home releases with John Travolta and Olivia Newton-John) the same day Grease had its 20th Anniversary Edition released.
The film was released also on RCA Capacitance Electronic Disc (CED) in 1983 by Paramount Home Video and
Laserdisc Extended Play by Paramount Home Video.
On September 17, 2002 it was released on DVD for the first time. June 10, 2003 (Widescreen Collection) it was re-released on DVD in Widescreen Letterbox format for the first time, 2004, November 6, 2006, August 5, 2008 (I Love the 80's Edition with changed artwork for Maxwell Caulfield and Michelle Pfeiffer on the cover), January 1, 2023, by Paramount Home Media Distribution. On March 12, 2013, Grease and Grease 2 were packaged together in a double feature DVD set from Warner Home Video.
In 2018 Grease 2 was released on Blu-ray for the first time. In connection with the film's 40th anniversary of Grease, Paramount released Grease on 4K Ultra HD Blu-ray, Blu-ray and DVD on April 24, 2018. along with Grease 2 and Grease Live! in Collectors Steelbox Edition.
On June 7, 2022 in connection with the film's 40th anniversary of Grease 2, Paramont released Grease 2 in Steelbox Edition by Paramount Home Entertainment.
The Steelbox Edition has artistic, stylized renders of Michael Carrington (Maxwell Caulfield) and Stephanie Zinone (Michelle Pfeiffer) against a glossy light-blue background for the front cover. The back cover features a dramatic, white lightning streak design, incorporating a small image of "The Cool Rider" on his motorcycle (from "Who's That Guy?" scene). Simular to the artistic, styilzed renders of Danny Zuko (John Travolta) and Sandy Olsson (Olivia Newton-John) that was used for the 40th anniversary 4K Ultra HD+Blu-Ray+Digital version of Grease four years earlier.
Remakes
The film's screenplay was adapted in the Kannada (India) feature film Premaloka, starring Ravichandran and Juhi Chawla, released in 1987, which went on to become a blockbuster.
Plans for a third film
In 2003, Olivia Newton-John confirmed that a second sequel was being developed. "They're writing it, and we'll see what happens. If the script looks good, I'll do it. But I haven't seen the script, and it has to be cleverly done." Newton-John died in 2022.
In 2008, it was reported that Paramount was planning a new sequel to Grease that would debut straight to DVD. However, the project never came to fruition.
In 2019, it was announced that a prequel to the original film entitled Summer Lovin with John August attached to write the screenplay was in the works at Paramount.
Stage musical
The film was later adapted into a musical, Cool Rider, with the script re-written and modified for the stage.