Although their debut album Leisure (1991) had been commercially successful, Blur faced a severe media backlash soon after its release, and fell out of public favour.

After the group returned from an unsuccessful tour of the United States, poorly received live performances and the rising popularity of rival band Suede further diminished Blur's status in the UK.

The band incorporated influences from traditional British guitar-pop groups such as the Kinks and the Small Faces, and the resulting sound was melodic and lushly produced, featuring brass, woodwind and backing vocalists.

Albarn's lyrics on Modern Life Is Rubbish use "poignant humour and Ray Davies characterisation to investigate the dreams, traditions and prejudices of suburban England", according to writer David Cavanagh.

Modern Life Is Rubbish is regarded as one of the defining releases of the Britpop scene, and its chart-topping follow-ups—Parklife and The Great Escape—saw Blur emerge as one of Britain's leading pop acts.

Blur hired new manager Chris Morrison and, to recoup losses, were sent by their record label Food to the United States as part of the Rollercoaster tour.

"[1] He felt the popularity that American grunge music was enjoying in Britain at the time would soon fade, and argued that Blur would embody a renaissance of classic British pop on their next album.

[1] After the still-sceptical Balfe relented, Food warily gave Blur the go-ahead to work on their second album with Albarn's first choice of producer, XTC leader Andy Partridge.

Modern Life Is Rubbish's sound is highly influenced by the traditional guitar pop of British bands such as the Kinks, the Jam, the Small Faces and the Who.

[18] While "Oily Water" harked back to the baggy sound of Leisure,[19] NME described "Intermission" as "a pub piano knees-up that rinky-dinks along then gets frazzled in guitars and speeded-up drums".

To offer contrast to the classicist songwriting, AllMusic noted that "Coxon's guitar tears each song open, either with unpredictable melodic lines or layers of translucent, hypnotic effects, and his work creates great tension with Alex James' kinetic bass".

[20] NME summarised the theme of the "thinly-veiled concept album" as a "London odyssey crammed full of strange commuters, peeping Thomases and lost dreams; of opening the windows and breathing in petrol ...

The announcement of the album's release included a press photo that featured the phrase "British Image 1" spraypainted behind Blur members (who were dressed in a mixture of mod and skinhead attire) and a Mastiff.

[6] SBK's strategy was to list the album at a developing-artist price (around three dollars less than standard), send the band on an intensive tour in 1994 and to target modern rock airplay with debut single "Chemical World".

[25] The plan fared poorly, as Modern Life had little impact in the US; the album did not chart on the US Billboard 200 and sold only 19,000 copies, a sharp decline compared to the 87,000 units that Leisure shifted.

While he felt the album had "enough faults to give a surveyor nightmares", he was impressed that, unlike their peers, "Blur [had] thrown on their old clothes and stormed into No Man's Land with all guns blazing".

[18] Q's David Roberts, in a favourable four out of five star review, called Modern Life "an energised, infectious romp around contemporary little England, by way of an exuberant trawl through a highly-coloured patchwork of its pop past".

[33] Writing for the Chicago Tribune, rock critic Greg Kot felt the album was a vast improvement over Leisure, which he found "highly derivative" of the Madchester genre.

"Nothing on [Leisure] prepares the listener for the adventurousness of Modern Life is Rubbish," he wrote, going on to describe the album as "a swirling, intoxicating song cycle that enriches superior popcraft with wiggy studio experiments.

"[32] Although they found the album to be "overly lengthy", Billboard agreed with Kot, dubbing Modern Life "a giant leap forward artistically" from Leisure.

[37] St. Louis Post-Dispatch writer Paul Hampel commended Blur for having "taken a bold step [with Modern Life] – backward", and pointed to their attempt at "a communion with past masters of smart, satirical Brit pop".

[6] Modern Life Is Rubbish remains highly regarded by critics;[16] Ian Wade of BBC Music wrote that the album was Blur's "first masterpiece... which established them as worthy of being mentioned alongside their heroes.

[17] Mark Redfern wrote in Under the Radar magazine that following Modern Life Is Rubbish, "[a] whole wave of Britpop bands followed in [Blur's] footsteps, and for a while, it was cool to be British again".

Blur's American label SBK Records preferred the group's original demo of "Chemical World", and included it on the album instead of the Stephen Street-produced version.