linguistic:translation, structural:scholar_edition, information:classification, linguistic:voice_change
Widespread recognition (1996–2000)

While his reputation grew steadily throughout the early 1990s, Wong's international standing was "thoroughly consolidated" with the 1997 romantic drama Happy Together (1997). Its development was influenced by the handover of Hong Kong from Britain to China, which occurred that year. Wong was widely expected to address the event in his next film; instead, he avoided the pressure by choosing to shoot in Argentina. The issues of the handover were nevertheless important: knowing that homosexuals in Hong Kong faced uncertainty after 1997, Wong decided to focus on a relationship between two men. He was keen to present the relationship as ordinary and universal, as he felt Hong Kong's previous LGBT films had not.

Happy Together tells the story of a couple (Tony Leung Chiu-wai and Leslie Cheung) who travel to Buenos Aires in an effort to save their relationship. Wong decided to change the structure and style from his previous films, as he felt he had become predictable. Teo, Brunette, and Jeremy Tambling all see Happy Together as a marked change from his earlier work: the story is more linear and understandable, there are only three characters (with no women at all), and while it still has Doyle's "exuberant" photography, it is more stylistically restrained. After a difficult production period – where a six-week shoot was dragged out to four months – the film was released in May 1997 to great critical acclaim. It competed for the Palme d'Or at the Cannes Film Festival, where Wong became Hong Kong's first winner of the Best Director Award (an achievement he downplayed: "it makes no difference, it's just something you can put on an ad.")

In his 2005 monograph, Brunette opines that Happy Together marked "a new stage in artistic development", and along with its successor – In the Mood for Love (2000) – showcases the director at "the zenith of his cinematic art." The latter film emerged from a highly complicated production history that lasted two years. Several different titles and projects were planned by Wong before they evolved into the final result: a romantic melodrama set in 1960s Hong Kong that is seen as an unofficial sequel to Days of Being Wild. Wong decided to return to the era that fascinated him, and reflected his own background by focusing on Shanghainese émigrés.

Maggie Cheung and Tony Leung Chiu-wai play the lead characters, who move into an apartment building on the same day in 1962 and discover that their spouses are having an affair; over the next four years they develop a strong attraction. Teo writes that the film is a study of "typical Chinese reserve and repressed desire", while Schneider describes how the "strange relationship" is choreographed with "the grace and rhythm of a waltz" and depicted in "a dreamlike haze by an eavesdropping camera".

The shoot lasted 15 months, with both Cheung and Leung reportedly driven to their breaking points. Wong shot more than 30 times the footage he eventually used, and only finished editing the film the morning before its Cannes premiere. At the festival, In the Mood for Love received the Technical Grand Prize and Best Actor for Leung. It was named Best Foreign Film by the National Society of Film Critics. Wong said after its release: " In the Mood for Love is the most difficult film in my career so far, and one of the most important. I am very proud of it." In subsequent years it has been included on lists of the greatest films of all time.