By 1989, many Bob Dylan fans were convinced that Dylan had completely lost his songwriting muse. His last two albums, Knocked Out Loaded and Down in the Groove, were arguably the two worst works of his career. In what seemed to be an ominous sign, most of the songs on those discs were either covers or tunes he wrote with others.
Thankfully, Dylan realized he needed to completely rethink his career. In 1988, he began his Never Ending Tour (which is still going), and he took advice from Bono and teamed up with producer Daniel Lanois for a new album. They spent months working on the record in New Orleans, carefully crafting each song and often radically reworking the material until it was just right. For the first time in years, Dylan seemed to truly care about the quality of his work. The result was his strongest album in nearly a decade – though in a typical Dylan move, he jettisoned two of the best tracks ("Born in Time" and "Series of Dreams") to make work for a couple of clearly subpar songs. Regardless, Oh Mercy is a landmark album.
Dylan's 2004 autobiography, Chronicles Volume 1, devotes an extremely long chapter to the making of the LP, though many Dylan experts have questioned the validity of some of the anecdotes.