Elliott Murphy returned to recording in New York City for his third album, emphasizing the point by posing for the cover in the middle of 42nd Street.

Enlisting producer Steve Katz, who had handled the last three Lou Reed albums, Murphy fronted a studio band including former Velvet Underground singer/guitarist Doug Yule and former Modern Lovers Ernie Brooks (bass) and Jerry Harrison (keyboards), who was soon to join Talking Heads.

They gave Murphy a more contemporary and diverse rock sound, further distinguished from the first two albums by Murphy's development into a more expressive singer.

He had even cut back on the referential nature of his lyrics, relying instead on clever wordplay and evocative free association, though he was still capable of throwing out lines like "Just a ballad of a thin girl," dangerous stuff for anyone who had been tagged a "new Dylan." For the most part, though, Night Lights showed Murphy to be moving beyond his obvious influences, even if his lyrics sometimes seemed in need of a sharper focus.