Hallström has often cited his father as a profound influence on his filmmaking. Though his father was a dentist, he spent much of his free time documenting his family and their special events on camera. Rather than watching television, Hallström often grew up watching his father's work projected in his own family living room. His father mainly made documentaries, which later shaped Hallström's own initial foray into the film industry as a documentarian for the Swedish superstar group, ABBA. Hallström's later feature-film projects have been profoundly shaped by his focused attention on portraying "real" families and their complicated dynamics.
Aside from the influence of his own family, Hallström has been profoundly influenced by the works of John Cassavetes. Parallel to Hallström's first experiences with documentary, the works of Cassavetes informed the director of the realistic cinéma vérité style. Although What's Eating Gilbert Grape is a fictional work and the actors fail to acknowledge the presence of the camera, the cinéma vérité influence remains evident. Principally, Hallström thematically reveals the interiority or reality of the character's lives in a way that is not at first obvious. Hallström has alluded to his belief that the films of Cassavetes are inherently comedic, and they approach comedy with the documentary tradition.
Hallström has also explained that he has been greatly influenced by Czech New-Wave filmmaker Milos Forman. Forman is perhaps most famous for blending together eccentric and vérité elements. Hallström, like Forman, made numerous films in the United States despite gaining initial success in European cinema. The reality of working in a foreign film market, with differing parameters for commercial success, undoubtedly shaped the careers of both directors.
