The character Gabbar Singh was modelled on a real-life dacoit of the same name who had menaced the villages around Gwalior in the 1950s. Any policeman captured by the real Gabbar Singh had his ears and nose cut off, and was released as a warning to other policemen. The character was also inspired by Gunga Jumna, where Dilip Kumar's character Gunga is a dacoit speaking with a similar dialect, a mix of Khariboli and Awadhi.

Danny Denzongpa was the first choice of Gabbar but had to miss out because he was shooting for Dharmatma in Afghanistan. Amjad Khan was almost dropped from the project because Javed Akhtar found his voice too weak for Gabbar Singh's role but was later convinced. For his preparation for the role Amjad read Abhishapth Chambal, a book on Chambal dacoits written by Taroon Kumar Bhaduri (actress Jaya Bhaduri's father). Sanjeev Kumar also wanted to play the role of Gabbar Singh, but Salim-Javed "felt he had the audience’s sympathy through roles he’d done before; Gabbar had to be completely hateful."

Gabbar's language was a mixture of North Indian Khariboli and Hindi, which was something new for the audiences so the dialogues were an instant hit and are still popular in India. Javed Akhtar says that Gabbar seemed to acquire life and vocabulary of his own as he wrote the film. His sadism lies in his choice of words like "Khurach, khurach (scratch)" when he talks to Hema Malini.

Amjad shot to stardom with the movie. His mannerisms and dialogues have become an integral part of Bollywood lexicon. Sholay went on to become a blockbuster, and is the highest grossing movie in India. Although the movie boasted an ensemble cast of superstars including Dharmendra and Amitabh Bachchan, he stole the thunder with his unorthodox and eerie dialogue delivery that was perfectly opposite to the total lack of empathy his character was supposed to convey. Even after forty seven years people fondly remember his dialogues and mannerisms.^[14] He later appeared in advertisements as Gabbar Singh endorsing Britannia Glucose Biscuits (Popularly knowns as "Gabbar Ki Asli Pasand"), and it was the first incidence of a villain being used to sell a popular product. The role of Gabbar Singh was so deep-rooted in people's mind those days that Amjad Khan was known for the rest of his life by this role alone and wherever he went he had to speak some dialogues from the film to amuse the public^[15][16] because the dialogues are very popular among the audiences of Indian Cinema.^[17]

The BBC have compared the impact of Gabbar Singh on Bollywood to the impact that Darth Vader later had on Hollywood. According to Anupama Chopra, "He’s like Darth Vader in Star Wars, pure evil, utterly terrifying and a cool baddie”.^[18]

In 2011, Amitabh Bachchan told a contestant on his Kaun Banega Crorepati TV show that when Amjad Khan visited their home, his son Abhishek Bachchan ran to him and said "Papa, Gabbar Singh aaya hai" (meaning: Father, Gabbar Singh is here!), and Bachchan had to convince his son that Gabbar was just a character played by Khan.^[19]

Gabbar Singh has been a subject of parodies and jokes innumerable times in the popular Indian media.^[20][20][21] Filmfare named Gabbar Singh the most iconic villain in the history of Indian cinema,^[22]

In Jai Hind (1994) comedian Senthil says "Arre O Sambha" while appearing as a dacoit.^[23]

In 2012 film Gabbar Singh, the character has been referenced by protagonist Venkataratnam Naidu (played by Telugu actor Pawan Kalyan), nicknaming himself after Gabbar Singh's character. Constable Ram Prasad (Ali) is nicknamed 'Samba' after Gabbar Singh's sidekick. The sequel Sardaar Gabbar Singh (2016 film), Pawan reprises his role, albeit with 'Sardaar' in front of his name, referring to the title given by Gabbar Singh's henchmen. Both Telugu films contain dialogues made famous by Sholay's antagonist, e.g. "Joh darr gaya... samjho marr gaya" (Whoever is afraid... they are dead).

In the 2015 film Gabbar is Back, the protagonist Aditya Singh Rajput (portrayed by Akshay Kumar) resembles Gabbar Singh and he also nicknamed himself after Gabbar's character.^[24]