Daryl Hall and John Oates recorded their first two albums with venerated producer Arif Mardin,[7][4] with their second album—the folk-soul release Abandoned Luncheonette (1973)—achieving the American hit single "She's Gone".

[8] Hall believed that although the duo embodied the 'Philly sound', having worked with Thom Bell and Gamble & Huff, they separated themselves by placing their "soul roots and street-corner gospel harmonies into other contexts.

"[4] Another motivation for the duo's stylistic change was their experiences with glam rock, particularly when supporting David Bowie on his 1973 Ziggy Stardust Tour of the United States.

[4] According to Chris Charlesworth, the material Hall and Oates were writing for War Babies was closer to rock than soul, thus Rundgren was deemed suitable to produce.

He said that using his own studio for the record allowed Hall and Oates to be "more experimental", later saying: "Often I was trying to interpret ideas into techniques we could use to get what they wanted, like an echo on the voice, a certain kind of keyboard tone or an especially watery sound.

[14] Rundgren comments that much of the record's atmosphere was intended to reflect the bleakness of "growing up in the nuclear age and how it had characterised the attitude of a generation", thus resulting in a "cultural manifesto" that stood in stark contrast to the light pop music that Hall and Oates had created before.

[11] The music reviewer Ian Birch characterises the album's unusual concept as "the Bomb Culture years siphoned through a '70's Scenario of rock, television and war.

"[21] War Babies opens with "Can't Stop the Music (He Played It Much Too Long)", written solely to Oates who was inspired by his reservations around touring.

[4] Considered the album's centrepiece,[14] "War Baby, Son of Zorro" has a heavy arrangement with phased guitar, dominant synthesisers, synth-treated vocals and television sound effects.

Bryan Bierman of Magnet considers it to be "possibly the most radical departure" in Hall and Oates' career, highlighting its funky, progressive sound and the lengthy mid-track breakdown centred around Rundgren's guitar, bassist John Siegler and drummer Willie Wilcox.

[23] Simultaneously, Hall and Oates began acquiring a cult following in the United Kingdom, where Abandoned Lunchonette was selling well as an import, so the release of War Babies in the UK was predicted by Bell to reach a wider audience.

[9] According to the author Frank Moriarty, it was an esoteric album "that was greeted with dismay by fans who expected more of the soft rhythm and blues with which the duo had established their career.

"[27] In his Rolling Stone review, Bud Scoppa called it a "jarringly disappointing album" which discards the sweet vocals, full arrangements and sentimental lyrics that characterised Abandoned Lunchonettte in favor of "a tough, big-city stance that sounds both forced and perverse."

He deemed it a shrill and effect-ridden LP with both the sound and material at fault, noting: "It's extremely rare for still growing artists to show this disdain for the audience they've managed to win.

"[8] Robert Duncan of Creem was interested by Rundgren's domination of the record's content and production, adding: "Speaking strictly in terms of the music, the album might be able to stand alone without the True Star.

[28] In his review for New Musical Express, Max Bell described War Babies as a "bona-fide goodie" which "maybe having worked on it will rescue Rundgren from the Utopia he's unfortunately ensconced in.

[9] Martin C. Strong, writing in The Great Rock Discography (2006), describes the album as "a heavier, more experimental set" whose commercial failure "marked the end of [the duo's] ill-fated tenure with Atlantic.

"[12] In his review for Magnet, Bryan Bierman described War Babies as "a unique highlight for the duo, and a weird detour on their road to master pop music.

[9] Hall noted that the duo "calmed down" after recording War Babies because it had been "completely untimely" and "was too real, too close to what was happening outside and people were getting into the disco craze.

"[4] In her Creem piece, Whithall reflected that "it seems to be assumed that if Babies had hit it big, that hard-edged Delaware Valley sound would have been with Hall & Oates a bit longer.

[22] Martin Aston of Mojo describes the "practically forgotten" War Babies as representing the fullest expression of the "glam-smitten, acid-laced and frazzled kind of blue-eyed soul" that Hall and Oates explored at the time.

[4] In Record Collector, Max Bell described War Babies as "a crazed train wreck of an album" and a "screaming, mutant, discordant mess", adding that it was Hall and Oates' "most experimental early work."

[30] Marcello Carlin of Uncut groups War Babies with Hall's avant-garde solo album Sacred Songs (1980) as "evidence of the grit beneath the shiny surfaces" of the duo's sound.