Jerry Dammers of the ska revival band the Specials started the record label in 1979.

[3] The label spawned the 2 Tone music and cultural movement, which was popular among skinheads, rudies and some mod revivalists.

Although 2 Tone Records was closely identified with the ska revival, efforts were made to broaden the label's musical output, releasing recordings by artists such as singer-songwriter Elvis Costello and the funk-punk band the Higsons.

Dammers, with the assistance of Horace Panter and graphic designers John "Teflon" Sims and David Storey, created artwork that was to become central to 2 Tone Records.

Named "Walt Jabsco", the fictional character was based on a photograph of Peter Tosh, a former member of the Wailers.