Between January and March 1986, the band recorded Stutter with Patti Smith live guitarist Lenny Kaye and engineer Gil Norton.

Described as a folk rock album, the songs on Stutter tackle the topics of insects, reincarnation and being a tortured artist.

Stutter was reissued on CD twice, in 1991 and 2017; its tracks "So Many Ways" and "Johnny Yen" were included on the band's compilation album Fresh as a Daisy – The Singles (2007).

[4][9] James caught the attention of Tony Wilson of Factory Records who owned the venue; the band signed with the label.

[4] Factory released the resulting effort, the band's debut EP Jimone, in November 1983 even though James did not have a contract with the label.

[4][11] Glennie thought Factory worked inefficiently and did not trust them to release an album; Whelan said the label would pay to have a single made leaving no money to promote it.

[17] Through Geoff Travis of Rough Trade Records, the band learned that Seymour Stein of Sire was interested in signing them.

[18] Wishing to have their songs reach a wider audience, the band signed a two-album deal with Sire and Blanco y Negro Records in November 1985.

After reassurances from Booth[clarification needed], Kaye flew from his residence in Upstate New York to the UK to start recording.

[21] The band met Kaye at Crescent Studios in Bath to record "Chain Mail", which was released single in January 1986.

[25] As Sire had given them a small budget for the sessions, to save as much money as they could, band members took to cycling between the house and the studio.

The live set up annoyed Kaye because there was a lot of bleeding between microphones, such as the drum mics capturing a guitar sound.

Gott said they were unable to bring out the potential in some songs, highlighting "Johnny Yen", as Kaye and Sire were too focused on "So Many Ways" sounding like a hit single.

[29] In retrospect, Glennie said the band were making the songs sound "needlessly complex", which he attributed to working on them for a long time.

[31] Booth wrote "Scarecrow", a song with a 6/8 time signature, in 1983, having been inspired by Patti Smith; it includes a reference to the biblical figure Joshua.

[27][41] The closing track, "Black Hole", talks about the mind being one's worst enemy, and features some of Booth's earliest lyrics.

[51] Stutter was released on CD for the first time in 1991, and again in 2017 as part of the Justhipper (The Complete Sire & Blanco Y Negro Recordings 1986 – 1988) compilation, with "Chain Mail", "Uprising", "Hup-Springs", and "Just Hipper" as bonus tracks.

[4][52] "So Many Ways" and "Johnny Yen" were included on the band's fourth compilation album Fresh as a Daisy – The Singles (2007).

[clarification needed] [32] Duncan Wright of Smash Hits said every track was a "polished nugget of fantasy and imagination full of mind-boggling details".

[61] Music critic Robert Christgau saw the album as a "place pleasant, unkempt, and all their own, but not private enough to suit them--hence their wry, well-meaning, angst-ridden, and ultimately impenetrable lyrics".

[58] In a review for Record Mirror, Eleanor Levy said that the album "shows just how difficult it is to transfer [the] spontaneity [of their earlier work] to vinyl".

[30] Q reviewer Phil Sutcliffe said there was "a sense of echoey space around busy little instruments," with the production emphasises detail only to reveal ... Gott and ... Glennie in pedestrian form".

[62] The Guardian listed Stutter as one of the "1001 Albums to Hear Before You Die", praising the record thus: "Before Madchester, and before the Horlicks rock of "Sit Down" became ubiquitous, James were an invigorating prospect: a folk-pop band apparently engaged in a bout of pro-wrestling with their instruments.