In 2013, Ed Sheeran sold millions of records, toured America with Taylor Swift and cut most of his second album, X (due out June 23rd). In October, he took a well-deserved vacation to Ibiza, and decided to take MDMA. "If I was ever going to try it, it would've been there," says Sheeran, who was attending the wedding of his producer, Jake Gosling. (Sheeran serenaded the bride and groom with "Stand by Me.") Just as he was peaking, he got a text from director Peter Jackson, asking him to write a song for the latest Hobbit film. "I thought the text wasn't real, because I was like, 'Is everything just great today?'"
It was another surreal moment in the life of the mild-mannered, diminutive Brit, who has become one of pop's unlikeliest stars. Sheeran, 23, grew up in rural Suffolk, England, and spent years playing coffeehouses and crashing on couches before breaking worldwide with 2012's multiplatinum +, which was full of hooky, heartfelt folk pop, tinged with subtle electronic touches.
He has since played the Grammys alongside his mentor Elton John ("Before the camera was rolling, he was like, 'Ed, this is the worst time to get your cock out.' He can remove your nerves by being a bit inappropriate"), drank margaritas with Paul McCartney, and played 66 shows with Swift, before selling out three nights at Madison Square Garden himself.
"To see the growth of it is mental," he says, sipping a Coke in a conference room at Atlantic Records in New York, just after returning from L.A., where he played Sir Elton's Oscar party. "I sat next to Donatella Versace, which was random. I don't really have much in common with her, but she seemed nice enough."
The stakes were high for X. So Sheeran wrote more than 120 songs in three years and cut tracks with producers like Rick Rubin, Pharrell Williams and Benny Blanco. "I wanted raw, honest songs from the heart," he says. "When you hear that Kesha-Pitbull song, you know it's a hit, but it doesn't make you want to cry or laugh or sit in a corner for five hours just repeating it."
Sheeran began seriously working on the album last summer, when he moved into a house in Venice, California, that belonged to George Harrison's son, Dhani. Initially, Sheeran had a hard time focusing. "I feel like everyone in L.A. loves the kind of hype that comes around a new artist coming over, but I was taking everything with a pinch of salt," he says. He grins while recalling one epic party including friends Swift, Ellie Goulding, Gavin DeGraw and Snow Patrol. "We just passed the guitar around and drank all night. It was fucking wicked."
But the Hollywood scene got old fast. Sheeran, who'd been in the U.S. virtually nonstop for eight months, was burnt out and feeling homesick. He'd hang out at a local dive bar called the Brig, where he'd do shots of Fireball cinnamon whiskey.
The album that emerged is packed with what Sheeran calls "songs about drunken regret and comedowns from certain things." "Sing" (produced by Pharrell) is about secretly drinking at a dry industry party, and the funky, R&B-flavored "Don't" is a screed about a real-life fling with another singer that grew ugly when she slept with Sheeran's close friend while he was staying in the same hotel. With lyrics like "Me and her, we make money the same way/Four cities, two planes the same day," Sheeran knows who fans will think it's about. "It's 100 percent not about Taylor," he says. "Taylor's one of these people that if you piss her off and she writes a song about you, it's not good news for you. I've never dated Taylor. I've dated a few singers, though." (Tabloids have linked Sheeran to Selena Gomez and Goulding.)
Sheeran did play the song for Swift after writing it. "She was just like, 'Whatever happens, ever, between us as friends, I never want to piss you off that much,'" he says. Swift has also been sharing her new music with Sheeran. "It's really fucking good," he says. "She's stepped up her game."
Sheeran has slowed down lately, cutting out alcohol completely as he promotes the record and prepares for a massive tour. "This is my working stage," he says. He can sometimes sound like an artist manager speaking of sales figures and strategy ("MSG was a good footprint on the industry," he says). "He's one of the most ambitious people I've met," says Mike Rosenberg, a.k.a. U.K. singer-songwriter Passenger, who has known Sheeran since he was about 15. "I think he's going to take over the world at some point."
"I'm more calculated than people think," Sheeran admits. "When I said I wanted to play Madison Square Garden, a lot of people said I was nuts. And I made sure I did it. And when I said I wanted to sell 4 million albums, and we were stuck on 2.5 million, I went to the States and got on the Taylor Swift tour and made sure I did it."
Even so, Sheeran manages to come across as an unassuming guy who could still be at home playing coffee shops. "Sometimes I feel like this isn't my life at all, that I'm just living someone else's life vicariously," he says. "I know that at some point, my career is not gonna have the same trajectory it has now. But by the time I have kids, I can always be like, 'Look, I met this person, and I partied with this person. And I had a fucking wicked time.'"
This story is from the April 24th, 2014 issue of Rolling Stone.