It is the twelfth and final track on the album Bad Hair Day, released as a single during the 1996 Christmas season. "The Night Santa Went Crazy" was also included in the compilation album The Essential "Weird Al" Yankovic. Both albums have received positive critical reviews.

The song starts with Santa's elves making Christmas presents for good, "Gentile" children (this works because "gentile" is slang for non-Jewish, and is not normally something somebody would bother to mention in a Christmas song). Suddenly, a drunken Santa bursts in with a rifle in his hand, and covered with ammunition. He says, "Merry Christmas to all / Now you're all gonna' die!", then proceeds to destroy half of the North Pole, bombing the workshop, murdering reindeers Cupid and Comet in the blast, then holding the elves and helpers hostage, and killing 5 of the other 9 reindeer in various gruesome ways (Donner and Vixen were spared, although not without post-traumatic stress disorder). The National Guard and FBI come to restore order, with the Eyewitness News broadcasting the incident and the ensuing battle between Santa and the government forces. Finally, Santa is arrested and locked up in a federal prison, with the possibility of release for good behavior in 700 years; Vixen gets therapy and Donner is left extremely nervous; the elves get jobs working for the postal service; and Mrs. Claus negotiates film rights for the incident. Near the end of the song, Yankovic explains why Santa went insane.

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