In 1990, after the fall of communism, there was a wide presentation of films which were shelved during the previous 20 years, and exiled directors like Milos Forman were welcomed back. A Film Festival Foundation was established, which organized the festival, using mostly private money. The 32nd Karlovy Vary International Film Festival (IFF), held in July 1997, was attended by many celebrities from the film world and social and political life.

It has become a tradition for Czech Prime Minister Václav Klaus to attend the Festival opening, and for the President of the Czech Republic, Václav Havel, to participate in the closing ceremony. Film personalities who have recently visited the Festival include Czech-American director Milos Forman, actors Christopher Walken (US), Salma Hayek (US), Steve Buscemi (US), Seymour Cassel (US), Jason Robards (US), and Klaus Maria Brandauer (Austria).

More than 250 films in 11 program sections were screened at the 32nd Karlovy Vary IFF. A total of 438 screenings were held in 12 festival screening halls and cinemas. Approximately 130,000 tickets were sold, up from 80,000 in 1996. About 12,000 accreditations were issued for the Festival, of which more than 800 were for journalists. The 33rd Karlovy Vary IFF was held from July 3rd to July 11th, 1998. The general partners of the 32nd IFF were Philip Morris and the Chemapol Group, and other sponsors were Ceskoslovenská obchodní banka, SPT Telecom and TransGas.

Dailies, weeklies, and film magazines that covered the festival included The New York Times, New York Post, Time Out, Variety, Hollywood Reporter, International Herald Tribune, San Francisco Examiner, Cinemania Online, National Public Radio (USA), Le Monde, L'Humanité, Cinema (France), Screen, Reuters, The Guardian, The Sunday Telegraph, BBC, Sight and Sound, and The European (GB).