[7] Inspiration came in early 1966 when Byrne was seated in a health education class during his freshmen year at San Jose City College in California.

"[8] When the band played the song live a few weeks later at a dance at West Valley College, local KLIV disc jockey Brian Lord, emceeing the event, was very impressed.

[9] Lord then put the band in touch with a couple of friends in Los Angeles, Hal Winn and Joe Hooven, who were about to start their own label, Double Shot Records.

[29] As a strategic decision, their debut album was also titled Psychotic Reaction, released in October 1966, including seven new songs composed mostly by John Byrne.

Richie Unterberger in Allmusic said: "the verses are thus almost stereotypical sub-British blues-rock, yet have a hypnotic groove of their own, and the vocals have a respectably sullen power, if in a somewhat downer frame of mind (in accordance with the lyrics about being depressed and romantically rejected)".

"Psychotic Reaction" has been featured in films such as Marek Kanievska's Less than Zero (1987), Gus Van Sant's Drugstore Cowboy (1989), Paul Schrader´s Auto Focus (2002) and Randall Miller´s CBGB (2013), and has done very well on Classic Rock radio.

Because of its inclusion on the original Pebbles compilation album, probably the best known of the many obscure covers of this song that were made in the 1960s is the one by Positively 13 O'Clock (i.e., Jimmy Rabbitt with members of Mouse and the Traps and others) in 1967.

"Psychotic Reaction" was also covered during the 1970s by The Radiators from Space (B-side to "Enemies", 1977) and by Television, who included the song in their early sets which emphasized the "rave-up" section.

The Nash the Slash version was released on his 1984 album American Bandages, inserting paraphrased excerpts of John Hinckley's letter to Jodie Foster,[33] as well as lines from the movie "Taxi Driver", between the verses.

This song is also played live by Tom Petty and the Heartbreakers on the Playback box set and seen in the currently out of print concert video, "Take the Highway" sung by drummer Stan Lynch.