By September 1990, Martin Scorsese’s once-great career seemed to have fallen into a decline. He was still a legendary director, of course: nobody who had made Taxi Driver and Raging Bull and Mean Streets could be regarded as anything else. But the Eighties had not been very kind to him. There had been brilliant films that had been commercial flops, such as The King of Comedy and After Hours. There were also accomplished but anonymous jobs for hire, such as the Tom Cruise vehicle The Color of Money and an episode of the TV series Amazing Stories. And his cherished passion project The Last Temptation of Christ – his most interesting and heartfelt film of the decade – had opened in 1988 to a chorus of anger from Christian fundamentalists, who vigorously picketed cinemas showing it. Cineastes, faced with their evening at the new Scorsese film being ruined by angry men telling them that they were going to hell, mainly chose not to bother.

Goodfellas remains one of the most entertaining films about deeply horrible people ever made

It was an altogether different kind of underworld that Scorsese chose to explore for his next project, the life of the Mafia operative Henry Hill between 1955 and 1980. He had not made a pure gangster film since Mean Streets in 1973, although many of the pictures that he had made subsequently dealt with the darker side of human life. The most famous modern films about gangsters were The Godfather and its sequel, which presented the world of organised crime with an operatic, slow-paced sensibility, and made the idea of becoming a member of “the family” seem almost glamorous and desirable, even though sudden, violent death (or a horse’s head in your bed) lurked nearby. Scarface had encapsulated the pulpy absurdity of the Reaganite get-rich-quick ethos, and Sergio Leone’s elegiac Once Upon A Time in America brought an almost phantasmagorical atmosphere to the genre. It seemed as if Scorsese would have to do something dramatically different or run the risk of disappearing into irrelevance.

While he had been making The Color of Money a few years previously, Scorsese took time away from Tom Cruise’s increasingly dazzling smile to read a non-fiction book by Nicholas Pileggi, Wiseguy. Pileggi’s beguiling and revelatory account of the everyday life of the New York Mafia appealed to Scorsese for its procedural aspects as much as the opportunity to make a gripping and visceral piece of cinema, and so he telephoned the writer in an attempt to purchase the rights. In the retelling, their conversation has something of the mythical nature of Stanley meeting Livingstone: Scorsese told Pileggi, “I’ve been waiting for this book my entire life”, to which the understandably overwhelmed writer replied, “I’ve been waiting for this phone call my entire life.”

The reputation of Scorsese’s complex, brilliant masterpiece continues to grow every year

Scorsese and Pileggi worked together on the screenplay on and off for the next few years, interrupted by Scorsese’s increasingly difficult task of filming Last Temptation of Christ. The director was clear about what he wanted the film to be: influenced by the MTV-inspired vogue for short scenes, quick cuts and an omnipresent soundtrack, he sought to take the energy of a film trailer and sustain that level of intensity over the film’s two and a half hour running time. He turned to his regular collaborator Robert de Niro, who agreed to play the supporting role of Jimmy Conway, a senior gangster in the organisation. De Niro was too old to play the protagonist Henry Hill, a part that went to the up-and-coming actor Ray Liotta, and he lacked the nervous and insane energy that the other lead role, that of the livewire Tommy de Vito, required. Scorsese had worked with Joe Pesci on Raging Bull a decade before and had been impressed by his comedic performance in Lethal Weapon 2. Tommy had to be both endlessly entertaining and charismatic, and terrifyingly unpredictable, as would be seen to great effect in the film’s memorable “Funny like a clown?” scene. The significant female role of Karen, Henry Hill’s wife, was played by Lorraine Bracco, who was introduced to Scorsese by his other regular collaborator Harvey Keitel.

The budget was set at $25 million, which was the largest budget that Scorsese had worked with (Last Temptation of Christ, an expensive-looking period epic, had cost $7 million), but he was aware that its pervasive swearing and gritty violence would be a hard sell to general audiences, who preferred the romanticism of the Godfather films or the cartoonish excess of Scarface. Scorsese wanted the atmosphere to be “cold, unfeeling and horrible”, and took particular care to show Hill’s narcotic-influenced decline into paranoia towards the end of the film, using a range of cinematic techniques to ramp up the intensity and agitation that he felt. It was, he felt, the very best film that he could have made of the material, but would it be enough to establish his career?

It premiered at the Venice Film Festival in September 1990 where it was greeted with great acclaim, and not a little relief. The influential critic Roger Ebert called it “the best mob movie ever.” Scorsese won the Silver Lion award for Best Director, but the film itself lost to Tom Stoppard’s debut film as director, his adaptation of Rosencrantz and Guildenstern Are Dead. This became something of a running irritation for Scorsese over the next few months, as his excellent film found itself in competition with Kevin Costner’s far more conventional and unchallenging epic Dances with Wolves and suffered commercially and in awards recognition.

Goodfellas made a significant profit at the box office, taking nearly $50 million in the US alone, but Dances with Wolves made almost four times that in America. It was little surprise that, at the Oscars, Costner’s film won Best Picture and Best Director, while Goodfellas, which had been nominated for six awards, won one, for Best Supporting Actor for Pesci. His acceptance speech, possibly dictated by irritation at his film’s fortunes on the night, was the shortest ever given at the awards: he simply said, “It’s my privilege, thank you”, and walked off.

Three decades on, it is clear that Goodfellas has been vastly influential on contemporary cinema and popular culture in a way that Dances with Wolves simply has not. It led to Scorsese becoming typecast as “the Mafia director”, and although he has made several films that have nothing to do with the crime genre since, it is notable that many of those that he is most noted for – The Departed, Casino, The Wolf of Wall Street and last year’s The Irishman – all follow in the footsteps of Goodfellas both stylistically and in terms of narrative. Casino, especially, was very underrated on its initial release in 1995, given the apparent similarities between its storyline and that of Goodfellas; comparisons were not helped by Pesci playing another live-wire mobster who is given to acts of incendiary violence. In some regards it is a more downbeat, sadder film than its predecessor, offering a sober meditation on how violence can destroy a man’s soul, and this would later find its fullest expression in The Irishman, Scorsese’s sombre, autumnal reflection on mortality.

Yet Goodfellas remains one of the most entertaining films about deeply horrible people ever made. Scorsese and Pileggi’s great skill is to humanise the characters so we feel for them, even as their actions become increasingly abhorrent, and it subtly combines the superficial glamour of the mobster lifestyle – as seen in the famous one-take shot that follows Hill and Karen into the Copacabana nightclub – with an unflinching examination of the miseries of organised crime. De Niro aside, the cast have seldom produced superior work to what they do here, even if Bracco’s role as a compromised therapist in The Sopranos – a series that was explicitly designed by its creator David Chase as a homage to Goodfellas, a film that he called “very funny and brutal and very real” – gives her a far greater arc than what she has to do in Scorsese’s film. However, her performance as Karen, who becomes the audience’s avatar of sorts, allows us initially to enjoy the spectacle and the excitement of the milieu, and then, by the end, to reel away from it all feeling horrified. As Tommy de Vito says, “I amuse you? I make you laugh, I’m here to fucking amuse you? What the fuck is so funny about me?! Tell me, tell me what’s funny!” By the end, it is almost impossible to answer that.

15 years later, Scorsese finally won Best Director and Best Film at the Oscars for The Departed, a fine, hugely entertaining film, stuffed full of great performances and quotable lines. Scorsese deserved the acclaim that he received for it. Yet as he collected his long overdue award, presented by the symbolic trio of George Lucas, Steven Spielberg and Francis Ford Coppola, he might have been forgiven for saying in his gracious and witty speech, “You know, and I know, that you should have given me the award for Goodfellas. BAFTA did, in their infinite wisdom, but you didn’t. And that’s fine, but honestly – Kevin Costner over me? Come on guys.” But he did not, and the reputation of his complex, brilliant masterpiece continues, deservedly, to grow every year.