It was written by all the members of the band, which had been reduced to a foursome following the death of Roy Orbison in December 1988, and it was the first song they worked on for the album.

The song was issued as a promotional single in the United States, where it peaked at number 16 on Billboard's Album Rock Tracks chart.

[2] Reduced to a four-piece following the death of Roy Orbison in December 1988, the group gathered at a private house they dubbed "Camp Wilbury",[3] at the top of Coldwater Canyon in Bel Air,[4] in April 1990, for the writing and initial recording sessions.

[5] George Harrison recalled that he, Tom Petty, Jeff Lynne and Bob Dylan had the musical part of the song finished "within an hour" of starting work.

[13] Author Ian Inglis identifies the main narrative as a seemingly "private … joke" between Dylan and Petty, whereas Harrison's section provides a welcome element of musical and lyrical intrigue in which, "stressing the need to be watchful, he warns that 'something's happening out there.

[18] Set on a concert stage, the original clip began with the sound of an orchestra warming up and closed with muted applause.

"[8] In another contemporary review, Greg Kot of the Chicago Tribune welcomed the song's musical quote from the Byrds' "Chimes of Freedom", pairing it with the Wilburys' rewriting of the standard "Blue Moon" as "7 Deadly Sins", and said that "For all its disposability, this record is loaded with charm.

3's "ingratiating goofiness" and said that, more so than the band's debut, the album demonstrated the Wilburys' embrace of a "common vernacular in the rock & roll of the Fifties and early Sixties".

[24] In his review of the 2007 box set The Traveling Wilburys Collection, for Mojo, Phil Sutcliffe said that "Inside Out", "If You Belonged to Me" and "You Took My Breath Away" represented the "engaging sort of pop-rocking" typical of Vol.