[12] Upon returning from the Betty Ford Center in 1985 where he had undergone treatment for substance abuse, Osbourne was presented with a substantial quantity of music written by guitarist Jake E. Lee.

Future Y&T, Suicidal Tendencies and Megadeth drummer Jimmy DeGrasso worked with Lee and Daisley on demos for the album, but this version of the band fell apart due to Osbourne's commitment to the Black Sabbath summer 1985 reunion concert at Live Aid; Castillo and Soussan ultimately replaced DeGrasso and Daisley once recording commenced.

On 1 April 1986, a live performance promoting the album in Kansas City, Missouri, was filmed and released later that year as the home video The Ultimate Ozzy.

At the time of its release, The Ultimate Sin was Osbourne's highest-charting studio album, as heavy metal was enjoying a surge in popularity during the mid-1980s.

In the UK, it was the final of four Osbourne albums to attain Silver certification (60,000 units shipped) by the British Phonographic Industry, achieving this in April 1986.

Though no official reason was given, rumors circulated that an ongoing legal struggle with bassist/songwriter Phil Soussan over his song "Shot in the Dark" was responsible for the album's failure to be re-issued.