One of the main chord progressions in "Naked Eye" can be traced to the spring and summer of 1969 when the band was touring in support of the Tommy album. The three-chord riff (F6/9-Cadd9-G) was sometimes played during the group’s very long and improvised versions of "Magic Bus" at that time, then later in expanded jams during "My Generation", as heard in the Live at Leeds version. Eventually Townshend composed the entire song around this progression.

"Naked Eye" was originally planned to be released on a 1970 Who EP entitled 6 ft. Wide Garage, 7 ft. Wide Car, a collection which was also to include "Water", "I Don't Even Know Myself", and "Postcard." There were also plans to release a live version of the song, but neither plan materialized.

Another track from the EP. This number was written around a riff that we often played on stage at the end of our act around the time we were touring early TOMMY. It came to be one of our best stage numbers, this was never released because we always hoped we would get a good live version one day. But then we're such a lousy live group...

The band likely began recording the song in 1970 during sessions for an EP that was eventually aborted when Townshend began focusing on his Lifehouse rock opera (these same sessions also yielded “I Don’t Even Know Myself”, “Water”, “Postcard”, and “Now I’m a Farmer”). It was eventually completed in the spring of 1971 during sessions for Who's Next, which included several numbers originally intended for Lifehouse. Evidence that the piece had been started but not completed can be heard in a BBC performance of the song from December 1970 in which the band mimed to the studio recording, which was faded out before the third verse (then likely not yet recorded) could be heard. The version on the remastered edition of Odds and Sods is longer than the original, which had been slightly edited.

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