Despite a strong first single, "The War Song", which became a No. 2 hit in the UK and a Top 20 hit in the US in late 1984, the album didn't achieve the level of success expected. While Waking Up with the House on Fire reached Platinum status in both the UK and the US, it was considered to be a disappointment compared to the success of the group's previous album, Colour by Numbers (1983). It sold approximately five million copies worldwide, being certified gold or platinum in many countries, and earning Double Platinum status in Canada.
The other two singles were "The Medal Song" (#32 in UK), (with its B-side, "Don't Go Down That Street" being released as a single from a subsequent EP in Japan but only reaching No. 69 in the charts) and "Mistake No.3" (#33 in US). In Mexico, "Don't Talk About It" was released as a single.
On the VH1 program Behind the Music, the narrator states, “Today, the band admits the album was a hurried and halfhearted effort.” Many music insiders also feel that Culture Club and Boy George may have fallen victim to overexposure in both the British and American press by the end of 1984. Subsequently, Culture Club decided to change direction for the next album, From Luxury to Heartache, by choosing a new producer and moving in a dance-oriented direction.
In 2008, the album was re-released in Japan, as a special collector "mini-LP" edition (a CD in a cardboard sleeve (featuring booklets) as a miniature version of the original vinyl album).
Reviews for Waking Up with the House on Fire have been mixed. Allmusic's Lindsay Planer rated the album two out of five stars. She noted that "overexposure in the media, the ever-changing tides and trends of pop music, and, quite frankly, a less than laudable collection of songs resulted in [the album] receiving a less than enthusiastic response." She also explained that it "was in no way aided by the irony-laden yet undeniable banality of the emphasis track [...], "The War Song"." However, she stated: "Two of the more interesting cuts are the vintage R&B "Crime Time" and the upbeat and soulful "Mannequin," blending Beach Boys-esque vocal harmonies with a distinctly Carolina beach and shag flavour." Robert Christgau rated it a B, stating: "Since I had even less use for the dismissive because-he-wears-dresses theory than for the ridiculous new-Smokey analysis, I could never figure out [Boy George's] means of commercial propulsion". He also stated that "this calls for concerted protest – which might be easier to whip up if the latest album weren't part three of more-of-the-same."