[3] The story involves a journalist named Paul Kemp who, in the 1950s, moves from New York to work for a major newspaper, The Daily News, in San Juan, Puerto Rico.

Set in the late 1950s, the novel encompasses a tangled love story involving jealousy, treachery and violent alcoholic lust among the Americans who staff the newspaper.

Thompson had unsuccessfully applied to work at the larger English-language daily called The San Juan Star which novelist William J. Kennedy edited.

"[5] Thompson finished a draft of The Rum Diary in the early sixties but continued to work on it throughout that decade, ultimately selling it to Random House after they agreed to publish his first book, Hell's Angels.

David S. Wills wrote in High White Notes: The Rise and Fall of Gonzo Journalism that the original manuscript, as well as the 1990s excerpts, were "littered with" racial epithets and racist depictions, but that these had almost all been removed by the time it was released as a book.