It contains music composed for the 1983 film Local Hero, produced by David Puttnam and both written and directed by Bill Forsyth.

[5] Following a string of three multi-platinum albums with Dire Straits—Dire Straits (1978), Communiqué (1979), and Making Movies (1980)—Knopfler, the group's lead singer, guitarist, songwriter, and producer, began to look for new musical challenges and opportunities.

[6][7] Following the completion of Dire Straits' fourth album, Love Over Gold, recorded from 8 March to 11 June 1982, Knopfler began work on the film's music.

[12] In his retrospective review for AllMusic, William Ruhlmann gave the album four and a half out of five stars, noting that Knopfler's "intricate, introspective finger-picked guitar stylings make a perfect musical complement to the wistful tone of Bill Forsyth's comedy film.

"[2] Rolling Stone magazine's contemporary review called Knopfler's film music debut an "insinuating LP of charming, cosmopolitan soundtrack music—a record that can make movies in your mind.