After the minor success of the group's debut single "Radio Free Europe" in 1981, R.E.M. manager Jefferson Holt felt the band was ready to record a longer release. While he felt they were not ready to record a full album, Holt figured an EP would be satisfactory. The band was uncertain at first if they would record with producer Mitch Easter (who had produced "Radio Free Europe"), but Easter managed to convince Holt and the band to let him produce it.
In October 1981, R.E.M. spent a weekend at Easter's Drive-In Studios recording the EP. Easter was a fan of the Krautrock band Kraftwerk, which inspired him to try various sonic experiments while recording. Easter incorporated tape loops and recorded singer Michael Stipe singing outdoors. The band was open to such experimentation and used the sessions as an opportunity to learn how to use a studio.