The Jayhawks was formed in 1984 by Minneapolis musicians Mark Olson (guitar and vocals) and Caleb Palmiter (bass), with the duo adding Tommy Rey (drums) for its first shows. In 1985 the short-lived trio was relaunched as a four-piece band after Olson recruited Steve Retzler (guitar), Marc Perlman (bass), and Norm Rogers (drums). Later that year Gary Louris (guitar and vocals) replaced Retzler.

Their first album, The Jayhawks, was released by Bunkhouse Records, a small independent label, in 1986. Their music at the time, mostly written by Olson, showed a strong roots/country rock influence. Rogers left and was replaced by Thad Spencer, and the band worked for the next years on demo tapes in search of a major label recording contract. During this period, Louris left the band briefly (following a car accident) and Dan Gaarder replaced him. Louris returned, and the collected demos from 1986 to 1989 were brought together to create Blue Earth, released on the Minneapolis label Twin Tone in 1989. On this album Louris shared more of the songwriting with Olson. After touring the U.S. in support of Blue Earth, Spencer left the band and was replaced in 1988 by Ken Callahan, who stayed with the band until 1993.

In 1991, Dave Ayers, the head of A&R for Twin Tone, was on a phone call with A&R representative George Drakoulias of Def American while Blue Earth played in the background. Drakoulias asked about the music and eventually met with and signed the band to the label later that year.

In 1992 the Jayhawks had their major label release, Hollywood Town Hall, on Def American. The album was produced by Drakoulias and recorded primarily in Los Angeles and at Pachyderm Recording Studio in Minnesota. Though Louris's fuzzy guitar was at the forefront, a clear folksy influence was also emerging in Olson and Louris's songwriting. The album was successful, powered by the single "Waiting for the Sun", and it brought the Jayhawks a wider fan base. Adding Karen Grotberg on keyboards and vocals, the band toured extensively.