The lyrics of "Warm Leatherette" reference J.G. Ballard's controversial 1973 novel Crash, which had heavily influenced Daniel Miller. Together with his college friend, he had worked on a film script based on the book, but after the project was abandoned, Miller decided to "write a song encapsulating [the script] in 2 and a half minutes". The song was recorded in Miller's apartment using 2 Revox B-77 tape machines. Series of sawtooth waves were recorded on a $150 Korg 700S synthesizer.

Miller went with the record to a few independent music shops, including Rough Trade in London, where it would be played to customers. "Warm Leatherette" was released as the B-side to "T.V.O.D.", the only single by Miller's musical project The Normal, and the very first release on his Mute Records label. However, since it was "Warm Leatherette" that gained more public attention, it was featured as the lead song on subsequent single re-releases. Although Miller did not expect the single to be successful, it sold thirty thousand copies.

The single was an early example of the then-burgeoning industrial music genre, emerging on a wave of numerous electronic pop experiments of the late 1970s in the UK. It has since been described as having "revolutionised electronic music with its punk aesthetic, stark sound and dark subject matter" and has been covered by numerous artists.

Grace Jones recorded "Warm Leatherette" for her 1980 album of the same name. The song was released as a promotional only 12" single. In 1981 it became the opening song on her A One Man Show tour.

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