Jos Ortega y Gasset suggested that: "All public employees should be demoted to their immediately lower level, as they have been promoted until turning incompetent". Ortega died in 1955, about 14 years before Peter published The Peter Principle.
After a cameo appearance in A Day at the Beach (1970), and a serious role later in 1970 as an ageing businessman who seduces Sinad Cusack in Hoffman, Sellers starred in Roy Boulting's There's a Girl in My Soup opposite Goldie Hawn. According to The Times, the film was a major commercial success and became the seventh most popular film at the British box office in 1970. Andrew Spicer, writing for the British Film Institute's Screenonline, considers that although Sellers favoured playing romantic roles, he "was always more successful in parts that sent up his own vanities and pretensions, as with the TV presenter and narcissistic lothario [sic] he played in There's a Girl in My Soup". The film was seen as a small revival of his career. However, Sellers's next films, including Rodney Amateau's Where Does It Hurt? (1972) and Peter Medak's Ghost in the Noonday Sun (1974), were again poorly received, and his acting was viewed as frenetic rather than funny. Despite these setbacks, Sellers won the Best Actor award at the 1973 Tehran Film Festival for his tragi-comedic role as a street performer in Anthony Simmons's The Optimists of Nine Elms. Fellow comedian and friend Spike Milligan believed that the early 1970s were for Sellers "a period of indifference, and it would appear at one time that his career might have come to a conclusion". This was echoed by Sellers's biographer, Peter Evans, who notes that out of nine films in the period, three were never released and five had flopped, while only There's a Girl in My Soup had been a success. In his private life, he had been seeing the twenty-three-year-old model Miranda Quarry. The couple married on 24 August 1970, despite Sellers's private doubtsexpressed to his agent, Dennis Selingerabout his decision to re-marry.
On 20 April 1972, Sellers reunited with Milligan and Harry Secombe to record The Last Goon Show of All, which was broadcast on 5 October. In May 1973, with his third marriage failing, Sellers went to the theatre to watch Liza Minnelli perform. He became entranced with Minnelli and the couple became engaged three days later, despite Minnelli's current betrothal to Desi Arnaz, Jr., and Sellers still being married. Their relationship lasted a month before breaking up. By 1974, Sellers's friends were concerned that he was having a nervous breakdown. Directors John and Roy Boulting considered that Sellers was "a deeply troubled man, distrustful, self-absorbed, ultimately self-destructive. He was the complete contradiction." Sellers was shy and insecure when out of character. When he was invited to appear on Michael Parkinson's eponymous chat show in 1974, he withdrew the day before, explaining to Parkinson that "I just can't walk on as myself". When he was told he could come on as someone else, he appeared dressed as a member of the Gestapo. After a few lines in keeping with his assumed character, he stepped out of the role and settled down and, according to Parkinson himself, "was brilliant, giving the audience an astonishing display of his virtuosity". In 1974, Sellers again claimed to have communicated with the long-dead music hall comic Dan Leno, who advised him to return to the role of Clouseau.
In 1974, Sellers portrayed a "sexually voracious" Queen Victoria in Joseph McGrath's comedic biographical film of the Scottish poet William McGonagall, The Great McGonagall, starring opposite Milligan and Julia Foster. However, the film was a critical failure, and Sellers's career and life reached an all-time low. As a result, by 1974 he agreed to accept salaries of 100,000 and 10 per cent of the gross to appear in TV productions and advertisements, well below the 1 million he had once commanded per film. In 1973, he appeared in a Benson & Hedges cinema commercial; in 1975, he appeared in a series of advertisements for Trans World Airlines, in which he played several eccentric characters, including Thrifty McTravel, Jeremy "Piggy" Peak Thyme and an Italian singer, Vito. Biographer Michael Starr asserts that Sellers showed enthusiasm towards these roles, although the airline campaign failed commercially.
A turning point in Sellers's flailing career came in 1974, when he teamed up with Blake Edwards to make The Return of the Pink Panther, starring alongside Christopher Plummer, Herbert Lom and Catherine Schell. The film was shot on a budget of 3 million and earned $33 million at the box office upon release in May 1975, reinvigorating Sellers's career as an A-list film star and restoring his millionaire status. The film earned Sellers a nomination for the Best Actor Musical or Comedy award at the 33rd Golden Globe Awards. In 1976, he followed it with The Pink Panther Strikes Again. During the filming from February to June 1976, the already fraught relationship between Sellers and Blake Edwards had seriously deteriorated. Edwards says of the actor's mental state at the time of The Pink Panther Strikes Again, "If you went to an asylum and you described the first inmate you saw, that's what Peter had become. He was certifiable." With declining physical health, Sellers could at times be unbearable on set. His behaviour was regarded as unprofessional and childish, and he frequently threw tantrums, often threatening to abandon projects. Peter Evans mentioned that Sellers was a "volatile and perplexing character [who] left a trail of misery in his private life". He also noted that Sellers had a "compulsive personality and [was] an eccentric hypochondriac" who became addicted to various medicines aside from his recreational drug habits during this period. His difficult behaviour during productions was widely reported and made it more difficult for Sellers to get employment in the industry at a time when he most needed the work. Despite Sellers's deep personal problems, The Pink Panther Strikes Again was well received critically. Vincent Canby of The New York Times said of Sellers in the film, "There is, too, something most winningly seedy about Mr. Sellers' Clouseau, a fellow who, when he attempts to tear off his clothes in the heat of passion, gets tangled up in his necktie, and who, when he masqueradesfor reasons never gone intoas Quasimodo, overinflates his hump with helium." Sellers's performance earned him a further nomination at the 34th Golden Globe Awards.
In March 1976 Sellers began dating actress Lynne Frederick, whom he married on 18 February 1977. Biographer Roger Lewis documents that of all of Sellers's wives, Frederick was the most poorly treated; Julian Upton likened it to a boxing match between a heavyweight and a featherweight, a relationship that "oscillated from ardour to hatred, reconciliation and remorse." Peter Evans claims that Milligan detested his friend's choice of partner and believed she was to blame for his increasing alcohol and cocaine dependency. On 20 March 1977, Sellers suffered a second major heart attack during a flight from Paris to London; he was subsequently fitted with a pacemaker. Sellers returned from his illness to undertake Revenge of the Pink Panther; although it was a commercial success, the critics were tiring of Inspector Clouseau. Julian Upton expressed the view that the strain behind the scenes began to manifest itself in the sluggish pace of the film, describing it as a "laboured, stunt-heavy hotchpotch of half-baked ideas and rehashed gags". Sellers too had become tired of the role, saying after production, "I've honestly had enough of ClouseauI've got nothing more to give". Steven Bach, the senior vice-president and head of worldwide productions for United Artists, who worked with Sellers on Revenge of the Pink Panther, considered that Sellers was "deeply unbalanced, if not committable: that was the source of his genius and his truly quite terrifying aspects as manipulator and hysteric." He refused to seek professional help for his mental issues. Sellers would claim that he had no personality and was almost unnoticeable, which meant that he "needed a strongly defined character to play." He would make similar references throughout his life: when he appeared on The Muppet Show in 1978, a guest appearance that earned him an Emmy nomination for Outstanding Continuing or Single Performance by a Supporting Actor in Variety or Music, he chose not to appear as himself, instead appearing in a variety of costumes and accents. When Kermit the Frog told Sellers he could relax and be himself, Sellers replied:
But that, you see, my dear Kermit, would be altogether impossible. I could never be myself ... You see, there is no me. I do not exist ... There used to be a me, but I had it surgically removed.