Is this one of the most underrated movies of all time?

Well, Cahiers du Cinema called it the best film of the 90s, so...

Maybe the film is not so much underrated as overlooked. It has a 7.9 rating here, which is incredibly good, and most who see it tend to like it. It got fairly mixed reviews when it was released, I think, but time has been very kind to the film. The main impediment to it being widely accepted as a classic is the gigantic success of Scarface and the inevitable comparisons of the two -- which is silly because their similarities are all superficial, and Carlito's Way is IMO a much more interesting, moving, and overall just better film. Don't get me wrong, Scarface is very good, but I find it slightly less impressive with each viewing, whereas Carlito ages like wine. Scarface is a little too cold and vacuous, even if that's sort of the point, and for me Carlito is an infinitely more likeable and interesting character than Tony.

Carlito's Way is also a breeze to sit through, each scene smoothly gliding into the next, whereas Scarface is a lengthy chore that doesn't really zip by like some of the best 3-hour films do. Scarface is technically accomplished like all De Palma, but I do prefer the beautifully fluid camera of Carlito, which dances and glides and swoops and pans etc. so very elegantly, compared to the more staid, locked-in tableaux of SF. And, most of all, few films, SF included, pack the emotional punch of CW, especially its ending. Really an extraordinary film, with probably my favorite Pacino performance, and certainly my favorite character of his. CW is easily my favorite De Palma movie, the only one where the form and content align so sublimely and create such an emotional experience, though Blow Out comes very close and Body Double, Casualties of War and Snake Eyes (flawed as it is) are special too.

As far as other films, Ferrara's New Rose Hotel is an intoxicating little movie that everybody seems to have either not seen or absolutely hate. It's truly bizarre, but extremely fascinating, and one of the cinematic "worlds" I most enjoy spending time in. I think it was ahead of its time and will be increasingly regarded as such as the years go on. Cutter's Way by Ivan Passer is I think one of the key texts of the New Hollywood movement, especially the 70s paranoia films e.g. Chinatown or the Parallax View; it's from 1981, and functions well as a last gasp of that kind of raw and gritty, politically-minded, angry 70s cinema. I also think Mann's film of Miami Vice is doomed to never be appreciated for the masterpiece it is, an incredible work of minimalist digital modernism.

Yes very much so. This film is better than Scarface in my opinion. How Penn didn't get a nomination is quite staggering really.

No doubt. I've always wondered why this isn't held in higher regard when thinking about mob movies. Definitely my favorite. I love the ending, although sad, when Carlito is rambling on his death bed. "Last call for drinks, bars closing". Makes me wonder if Depalma threw some Dutch Schultz dying ramblings in there. Not everything carlito said as he was dying made sense much like Schultz on his death bed. Nice touch if so.

No, it's rated quite properly. It was a pretty boring movie; about 2 hrs of slow dialogue and 20m of action. Extremely disappointing to say the least. Shouldn't be mentioned in the same sentence as Scarface.

Yes

Carlito's way is a MUCH better film than Scarface, although most people would say Scarface was better. The fact that Pacino and Penn didn't both win oscars for their performances is mind boggling. Maybe it comes down to my own personal preference but I think this was Pacino's greatest performance and even better than his portrayal of Michael Corleone in the Godfather Part two.

Definitely De Palma's finest work. 10/10 for me.

I always thought Scarface was considered to be a kind of "so bad it's good" movie or something, and became a cult classic over time. I don't even think Pacino did a major motion picture for another 6 years after that, so I always thought it almost ruined his career. But to actually read and hear people compare it to The Godfather or Goodfellas is sort of mind-boggling to me. Those films, in addition to Carlito's Way, have a timeless quality about them, while Scarface looks incredibly dated. Scarface has a lot of unintentional comic elements about it, especially the accents. But Carlito's Way is a more serious film, with moments of lightness and genuine humor that feel more real. I knew it got mixed reviews, but when I first saw it, I was immediately hooked and honestly think it's one of Pacino's best acting efforts, right behind his very best in the 70s. And definitely one of DePalma's best directed efforts, if not best. As another poster alluded to, this film has a flow about, despite it's long running time, just smoothly transitions from scene to scene with no boring or unnecessary parts.

I don't know that it's underrated. As another poster pointed out, Cahiers du cinema named it the best movie of the decade for the 90s, and I'm inclined to agree with them. De Palma made an absolute masterpiece in a genre (Crime Drama focusing on the mob) that was by that point pretty well worn out (although Scorsese did the same thing two years later with Casino, which is in my opinion his best movie). Pacino and in particular Penn do some of the finest work of their careers, too. Carlito's Way is note perfect from beginning to end.