Upon its release, "Everybody Knows This Is Nowhere" received generally favorable reviews from critics. Bruce Miroff of "Rolling Stone" wrote a favorable review, describing Young's voice as "perpetually mournful, without being maudlin or pathetic. It hints at a world in which sorrow underlies everything [...] because that world is recognizable to most of us, Young's singing is often strangely moving." Despite stating that "in several respects album falls short of his previous effort" and that "the lyricism of the first album can only be found in faint traces," he concluded that the album "offers ample rewards. Young's music partially makes up for its lack of grace by its energy and its assurance." Robert Christgau wrote in "The Village Voice" that "Young is a strange artist and I am not all the way into him yet, but this record is haunting". The original review was printed with a grade of "B+", but Christgau later said he would have changed it to an "A–".