Minneapolis friends Dan Murphy and Karl Mueller decided in the summer of 1981 to start a rock band. Murphy had played guitar in a band during high school and Mueller was just learning to play the bass guitar but they needed a drummer. Mueller knew Dave Pirner through mutual friends and asked him about playing drums. They formed a three piece group under the name Loud Fast Rules, playing in garages, at parties, and eventually in local clubs and bars such as First Avenue. Pirner had also been guitarist in a band called The Shitz, in which Mueller and Murphy had seen him play. They realized that Pirner was a better guitarist and singer than drummer and moved him from drums to rhythm guitar and vocals, while Pat Morley was added on drums. In January of 1984 the group changed its name to Soul Asylum. During that year the group signed with Minneapolis-based independent record label Twin/Tone Records for their first album Say What You Will (1984). After the album was produced Morley left the group and Grant Young was introduced as drummer. On November 13, 1984 the group headlined for the first time at 7th Street Entry (Minneapolis). The album was later re-released under the title Say What You Will Clarence. . . Karl Sold the Truck (1984). For the next nine years the band played countless United States club shows and toured parts of Western Europe. They had some success as a live show, gathered a small following of fans, and made the college radio charts; however, their album sales were consistently low. Soul Asylum made three additional albums under Twin/Tone before their final production under that label, Clam Dip & Other Delights (1988). The band signed with A&M Records in 1989 as part of a distribution agreement between Twin/Tone and A&M. Their first album released through A&M was Hang Time (1988), produced by Lenny Kaye before the contracts between A&M and Twin/Tone were finalized. After the mostly unsuccessful release of their 1990 album, Soul Asylum and the Horse They Rode In On (1990), the band found themselves languishing at A&M Records without much support, album promotion, or enthusiasm for another album. Soul Asylum found that they were not so much being dumped by A&M Records as were being set adrift in a backwater of low promotion and low production titles.

With album sales low and A&M support waning, Soul Asylum nearly folded. The members took "day jobs" and reconsidered their purposes and goals as a band. During this time Pirner and Murphy wrote lyrics and music for acoustic songs and toured the Midwest club scene under the moniker Murphy and Pirfinkle. Early in 1992 the foursome decided to shop for a new record label and landed themselves in the studio of Columbia Records, where they produced Grave Dancers Union (1992). The album began with reasonably successful sales that skyrocketed after their third single, "Runaway Train," pushed the album to number eleven on the charts and caused it to sell to multi-platinum levels. The single, released on MTV with a public service announcement-like video about missing children, vaulted to number five on the charts. The success of Grave Dancers Union pushed the band into world-wide stardom, generating appearances at the inauguration of United States President Clinton, the concert for the 1996 opening of the Rock and Roll Hall of Fame, the White House for the signing of the National Service Trust Act of 1993, the MTV Music Awards, several United States and international tours, and television interviews on the "Tonight Show with Jay Leno" and the "David Letterman Show."

It was more than two years before Soul Asylum began working on their follow-up album, which was produced by Butch Vig and released on the Columbia label, under the title Let Your Dim Light Shine (1995). The album was well received by a large audience, but did not achieve the sales success of its predecessor. It topped at number six on the charts, and the single "Misery" hit the Top 20. Their next album, released in 1998, was Candy From a Stranger (1998). The album received solid, though not sparkling, reviews and respectable sales in spite of indie and punk fans' attitude that the band had "sold out" to a softer, more mainstream sound with their last two albums.

Drummer Grant Young played with the group from 1984 to 1993, leaving shortly after the release of Grave Dancers Union, though it was 1995 before a separation agreement was finalized. Sterling Campbell replaced Young in 1993, drumming with the group through the 1998 production of Candy From a Stranger, after which he departed to pursue independent music projects. At that time, Ian Mussington was hired as drummer. Dan Murphy also played with Minneapolis' Golden Smog in the 1990s. Pirner contributed to the vocals for Golden Smog's album On Golden Smog (1996), the sound track for the motion picture Chasing Amy, and on many other collaborations.