It was originally released in April 1994 by RCA Records as the lead single from the duo's debut album of the same name (1995).

It was written by Melanie Thornton with Robert Haynes and Mehmet Sönmez, and produced by Frank Farian, Ulli Brenner and Gerd Amir Saraf.

"Sweet Dreams" received favorable reviews from music critics and was a global commercial success, reaching number one in both Italy and on the Canadian RPM Dance/Urban chart.

Thornton arrived in Germany in 1992 with $15 in her pocket[4] and found work with some small-time record producers who needed a vocalist for demo tracks.

Thornton then suggested American rapper Lane McCray, which she had met three weeks earlier, while working with a cover band when he filled in as a replacement vocalist.

[8] Gil L. Robertson IV from Cash Box magazine named it a standout track of the Sweet Dreams album.

[10] Simon Price from Melody Maker felt the "scarily consistent" La Bouche "rok da house once again in reliably techno-tronic style.

"[11] Pan-European magazine Music & Media remarked that the added value of this "throbbing piece of Euro dance is Melanie Thornton's massive vocals, which definitely set the track apart from most of her competition.

"[12] Music & Media editor María Jímenez described it as "a high energy track with a pumped up familiar German techno sound and a little club hysteria," adding that it is "a prime candidate for crossing over.

"[13] Alan Jones from Music Week declared the song as "pulsating pop/hi-NRG with some refreshing bursts of guitar" and "yet another Euro-invader that is sure to score here.

"[14] On the 1996 UK re-release, he added that its "throbbing, melodic Eurodance not too far removed from some of Snap's early work, it is hugely commercial.

[22] The European version was directed by Nigel Simpkiss[23] and features Thornton and McCray performing the song surrounded by candlelight, candelabrums, red curtains, a bonfire, soap bubbles and several back-up dancers.

[25] In 2017, American entertainment company BuzzFeed ranked "Sweet Dreams" at number 53 in their list of the "101 Greatest Dance Songs of the '90s".

"[26] James Arena, writer of Stars of '90s Dance Pop: 29 Hitmakers Discuss Their Careers said that the song and its follow-up, "Be My Lover", "are widely regarded today as indispensable classics of the decade.