The song was an immediate success, shipping 2 million copies in the United States, being certified Platinum, and spending 10 weeks at number one on the Billboard Hot 100, ultimately becoming Newton-John's biggest American hit. The song reached number 7 on the UK chart in November. The song was nominated for the Grammy Award for Best Female Pop Vocal Performance and won the Billboard Award for Top Pop Single.
The video features Newton-John, dressed in a tight leotard, as trying to make several overweight men healthy. She repeatedly tries to make the men lose weight, but they fail comically and she leaves the room to take a shower. When the men work out on their own, they suddenly transform into muscular, attractive men. A stylistic shot shows one muscular man glancing at his overweight self in a mirror. Newton-John is shocked when she returns to this, and starts to flirt with them. Two of the men secretly go out, holding hands, implying they are gay. This surprises Newton-John, as does the sight of two more of the men leaving with their arms around each other. Finally, she finds that the last of the overweight men is straight and they go off to play tennis together.
The Olivia Physical video (where "Physical" music video was included) won a Grammy Award for Video of the Year in 1983. The video was featured on Pop-Up Video on VH1 and was the first video to air on Beavis and Butt-head, on which they changed the channel to "I Wanna Be Sedated" by The Ramones.
