Smith's family hired his former producer Rob Schnapf and ex-girlfriend Joanna Bolme to sort through and finish the batch of over thirty songs that were recorded for the album, although the estate retained final decision on which tracks to include.

[5] Smith battled heavy drug addiction and severe depression for most of his life,[6] although he was sober in his final days, seeking treatment at the Neurotransmitter Restoration Center in Beverly Hills and even giving up alcohol, caffeine, red meat, refined sugars and most of his prescribed psychiatric medications on his 34th birthday.

Smith took to sobriety with the same intensity with which he took to intoxication, and he found himself suddenly face-to-face with a lifetime of depression and unmanaged emotional trauma.

Smith's estate hired Schnapf and Bolme to complete mixing on these tracks and eventually chose fifteen for inclusion on the album, which was ultimately released on the Anti- label.

"Pretty (Ugly Before)" was previously released as a single in August 2003 on Suicide Squeeze Records, along with a different version of "A Distorted Reality Is Now a Necessity to Be Free".

[13] In "King's Crossing", where he sings "It's Christmas time and the needle's on the tree, the skinny Santa is bringing something to me", Smith alludes to using heroin, which he had many problems with.

[14][15] The lyrics also contain references to the practice of a Circuit rider (religious), the Liberty Bell, The Dalles, Oregon and Lite-Brite toys.

"[16] From a Basement on the Hill was released on October 19, 2004, almost a year after Smith's death, through record label ANTI-, a sub-label of Epitaph.

Many reviewers complimented the album's attempts to expand Smith's sound, such as the incorporation of instrumental passages, as well as heavier, guitar-based material.

"[3] Rolling Stone had some reservations, observing that "this is an album about the seductions of oblivion, and a few of the more densely arranged songs mimic the characters in the lyrics, stumbing around without quite connecting.

Q wrote, "Given that its backstory involves one of the grimmest deaths in music history, it's tempting to view this album darkly, but really, there's no denying the new twist here...

Without wanting to second-guess his mindset, this music often sounds like the madness surrounding its creator – his heroin troubles, an allegedly turbulent relationship, his struggles against depression.

So what dominates are these loud, wayward Los Angeles epics full of gothic grandeur, broken-glass emotions, bizarre soundscapes and heavy, early-'70s guitars."

[31] Other critics, however, were cautious about viewing the album as a suicide note: Mojo felt that "to do so would be to miss the crucial point – that From a Basement on the Hill is of a piece within a body of work that stretches back to the mid-'90s.