The album's themes deal mostly with the environment, climate and seaside living, and were heavily inspired by the Isle of Skye in Scotland, where frontman Ian Anderson had recently purchased property.

Stormwatch was notably the last Tull album to feature the "classic" line-up of the 1970s, as drummer Barrie "Barriemore" Barlow and keyboardists John Evan and Dee Palmer all left or were fired from the band in the months after the album's tour concluded in April 1980; further, bassist John Glascock had died from heart complications in November 1979 during the tour.

Anderson described the dismissal of Glascock as being in the interest of his own health and nothing personal: "Somebody had to be the tough guy and the nature of my hard message to him was, "John, I really don't think you can carry on working on this album, you've really got to go and get straightened out...

Much of the album's themes and lyrical content were inspired and shaped by Anderson's recently purchased estate in Kilmarie on the Isle of Skye, Scotland, as well as the salmon farming business which he was beginning to embark upon at the same location.

The track "Dun Ringill" is named after the historic site of an Iron Age fort on the Isle, which served as the original seat of the Clan MacKinnon.

Other tracks reference the constellation of Orion, the legend of the Flying Dutchman, the conjecture of global cooling common during the 1970s and what Anderson called his "sceptical nature" of oil drilling in the North Sea.