The album is notable for its expansion of Mitchell's artistic vision and its varied song topics (ranging from the aesthetic weight of celebrity, to observation of the Woodstock generation, to the complexities of love), Ladies of the Canyon is often viewed as a transition between Mitchell's folky earlier work and the more sophisticated, poignant albums that were to follow. In particular, "For Free" foreshadows the lyrical leitmotif of the isolation triggered by success that would be elaborated upon in For the Roses and Court and Spark. The sparse, alternate-tuning laden sound of later records comes to the forefront on "Ladies of the Canyon" (one of those "ladies" supposedly being female underground comix pioneer Trina Robbins).
Of all of Mitchell's work, this album is arguably the most related to her long-standing friendships and relationships with Crosby, Stills, Nash, & Young (whose hard rock arrangement of "Woodstock" was one of their three radio hits in 1970). A number of the album's songs, including the aforementioned "Ladies of the Canyon" and "Woodstock", feature densely stacked, wordless harmony overdubs reminiscent of David Crosby's oeuvre; Crosby himself has performed "For Free" for many years. "Willy" is an infatuated paean to Graham Nash. "The Circle Game", one of the artist's early signature songs, features background vocals from all four, and is a response to Neil Young's "Sugar Mountain". "Big Yellow Taxi" has become a standard over the years, even being sampled by Janet Jackson. In 1995 Annie Lennox performed the song "Ladies of the Canyon" and released it as the B-side of her single "No More I Love You's".
In a contemporary review for The Village Voice, Robert Christgau gave the album a "B+" and found it "superior to her previous work, richer lyrically and more compelling musically." Christgau said that the album's second half is "almost perfect, and the arrangements are intelligent throughout", but found Mitchell's voice weak and her wordplay inconsistent. In a 1981 review, Christgau gave the album an "A–" and said that, despite the occasional "laughably high school" wordplay, Mitchell's reliance on piano suggests "a move from the open air to the drawing room ... that's reflected in richer, more sophisticated songs."