It was first released in June 1982 as part of Dunedin Double, an early Flying Nun compilation EP featuring The Chills, as well as Sneaky Feelings, The Stones, and The Verlaines.

[3] Written by Chills frontman Martin Phillipps, "Kaleidoscope World" was, like many other early releases from the Flying Nun label, recorded in very lo-fi surroundings, on Chris Knox's four-track tape by Doug Hood in a room at Paul Kean's house.

[4] The line-up of the Chills that recorded the song consisted of Martin Phillipps (guitar/vocals), Alan Haig (guitar), Frazer Batts (keyboards) and Terry Moore (bass).

The song features a swirl of jingle-jangle guitar over a background bass pulse and quiet synth, and is a prototype and epitome of what came to be known as the "Dunedin sound".

The song's title was borrowed for a major 2021 exhibition of Flying Nun-related art and ephemera to commemorate the label's 40th anniversary, at Dunedin's Hocken Library.