Members Jon Auer and Ken Stringfellow began work on Failure near the end of 1987, although the band had previously recorded some demos earlier that summer.

Some of the sessions were conducted at a recording studio constructed by Auer and his father, which housed an 8-track analog tape machine and a small mixing console.

Auer mixed the album in one night using headphone in the absence of Stringfellow, who was on vacation with his family in Hawaii.

The CD version had no time restrictions and includes the same content as the cassette.

"I May Hate You Sometimes" appears in Children of Nuggets: Original Artyfacts from the Second Psychedelic Era, 1976–1995, and was also featured in the 2000 Daria telemovie Is It Fall Yet?