The 42nd annual Berlin International Film Festival was held from 13 to 24 February 1992. The festival opened with The Inner Circle by Andrei Konchalovsky. The Golden Bear was awarded to American film Grand Canyon directed by Lawrence Kasdan. The retrospective dedicated to Babelsberg Studios films was shown at the festival.

The Inner Circle is a 1991 drama film by Russian director Andrei Konchalovsky, telling the story of Joseph Stalin's private projectionist and KGB officer Ivan Sanchin between 1939 and 1953, the year Stalin died. Sanchin is played by Tom Hulce, and the film co-stars Lolita Davidovitch and Bob Hoskins. The film is based on a true story and is an American, Italian and Russian production. It is in English and has a running time of 137 minutes.