Following Chicago's Disco Demolition Night in mid-1979, disco music's mainstream popularity fell into decline. In the early 1980s, fewer and fewer disco records were being released, but the genre remained popular in some Chicago nightclubs and on at least one radio station, WBMX-FM.

In this era, Chicago radio jocks The Hot Mix 5 and club DJs like Marshall Jefferson, Ron Hardy and Frankie Knuckles played various styles of dance music, including older disco records, newer Italo Disco, hip hop and electro funk tracks, as well as electronic pop music by Kraftwerk and Yellow Magic Orchestra, and recent danceable R&B productions in the genre now known as boogie.

Some of these DJs also made and played their own edits of their favorite songs on reel-to-reel tape, focusing on the portions of songs which worked well on the dancefloor. Some even mixed in effects, drum machines, and other rhythmic electronic instrumentation in an effort to give songs more appeal. These edits and remixes were rarely released to the public, and even then were available only on privately pressed vinyl records or on mixtapes.

One DJ, Jesse Saunders, ran a vanity record label through which he released original dance music productions which emulated various popular styles of the day. In 1984, the label released, on 12-inch single, a song called "On and On". Saunders composed the track with Vince Lawrence in order to replace a record which had been stolen from Saunders' collection, the "On & On" bootleg disco megamix by Mach. That megamix, a pastiche of loops from several disco records, particularly the bassline from Player One's "Space Invaders" (1979), had been Saunders' "signature" tune as a DJ; it was one that other DJs in the city didn't have or didn't play. Saunders & Lawrence added hypnotic lyrics and electronic instruments, utilizing a Roland TR-808 drum machine as electronic percussion as well as a Korg Poly-61 synthesizer and Roland TB-303 bass synthesizer. In a 2010 interview, Saunders claimed the song sought to capture the essence of the style of disco that other local DJs were playing at the time, a style which he says was already known locally as "house".[1][2]

Saunders' success with the relatively unpolished "On & On" inspired other Chicago DJs to try their hand at producing and releasing original songs in a similar style, using electronic instrumentation. Early such recordings included Jamie Principle and Frankie Knuckles' "Your Love"; and Chip E.'s "The Jack Trax" record, featuring the songs “It’s House” and “Time to Jack”, each of which used complex rhythms, simple bassline, sampling technology, and sparse vocals.

B J Donovan