As the follow-up to the number-one hit "Tired of Waiting for You", and having their previous three singles all chart among the top two, it was less successful, reaching number 17.

The song was written as a musical experiment, rather than as an intended single, according to Davies in an interview, where he also claimed that the demo became the master version of it.

[4] "Ev'rybody's Gonna Be Happy" drew inspiration from the Earl Van Dyke trio, whom the Kinks had previously toured with.

[4] Upon hearing the playback, the Kinks producer Shel Talmy was skeptical of the single's release, as he did not like the sound, in contrast to Davies who was convinced that it would become a hit.

As well as being the US B-side, "Ev'rybody's Gonna Be Happy" was included as the first track on side 2 of the US version of the Kinda Kinks album.