The duo formed a week after Brian Viglione witnessed Amanda Palmer perform solo at a Halloween party in 2000.

Additionally, Palmer "liked the parallel between Dresden (destruction) and Dolls (innocence, delicacy), because it is very much in keeping with the dynamics of the music, which sometimes goes from a childlike whisper to a banshee scream within a few seconds".

[7] The duo was featured in a webcast performance at the 2002 Ig Nobel Prize ceremony in Cambridge, Massachusetts.

[11] On October 6, 2005, The Dresden Dolls were interviewed by the subject of one of their songs, Christopher Lydon, on the radio show Open Source.

On June 5, The Dresden Dolls hosted a free concert at the Paradise Rock Club in Boston.

The entire event—concert and street performances—was filmed and the resulting DVD, Live: In Paradise, was released in Europe on October 10, 2005, and in North America on November 22, shortly after the band's fall 2005 tour.

[14] Over the summer of that year, the duo performed at South by Southwest, Bonnaroo, Britain's Reading and Leeds Festivals, and Lollapalooza, in addition to touring with Panic!

The book also contains the lyrics, sheet music, and notes on each song on the album, as well as a DVD featuring a 20-minute interview with Palmer about the origins of the band and the first LP.

[22] On July 10, 2007, the DVD Live at the Roundhouse was released in the U.S. From December 27, 2007, to January 13, 2008, their Winter Tour started at the Sixth & I Historic Synagogue in Washington, D.C., and ending at The Norva in Norfolk, Virginia.

Released on May 20, 2008, it is a collection of B-sides and rarities, along with new recordings of old favorites and cover songs that were previously only available as live versions.

[25][26] In late July and early August 2009, a rumor began to spread that the band was "reuniting for performances in 2010" but Palmer clarified in her blog on August 7: "There's been a ton of press lately re-printing an old quote from an old interview that's now blown up into a full-fledged press rumour that Brian and I have planned Dresden Dolls' shows for 2010.

[31] On April 15, 2015, they had a show in New York to celebrate Record Store Day and promote the release of The Virginia Monologues.

[citation needed] On her There Will Be No Intermission tour in 2019, Amanda Palmer announced that The Dresden Dolls would be recording and releasing a new album in 2020.

[36][37] Palmer named her influences as Cyndi Lauper, Laurie Anderson, Kate Bush,[38] Bauhaus, The Cure, The Legendary Pink Dots, Robyn Hitchcock, Nick Cave,[38] The Beatles, Violent Femmes, Yazoo, Soft Cell, The Thompson Twins, Depeche Mode, Neutral Milk Hotel, and Brian Eno.