"We put on this old 7-inch by Mickey and the Soul Generation which was a rare groove record with a mad rock guitar intro and no beat. I started vari-speeding it so it sounded all warped. Chris Bangs got on the microphone and said, 'If that was acid house, this is acid jazz'. That's how acid jazz started, just a joke!"
Gilles Peterson teamed up with Eddie Piller to form the record label Acid Jazz, shortly after Bangs had coined the phrase. Piller had previously managed the James Taylor Quartet. The label's first signing was singer-songwriter Rob Gallagher's band, Galliano.
The first single from Acid Jazz was "Frederick Lies Still" from Galliano and was followed by albums by individual bands such as the Brand New Heavies, New Jersey Kings, Mother Earth, the Sandals, as well as the production of compilation albums such as the Totally Wired series, and compilation albums with a focus on music emerging from a particular country (for example, Sweden). Acid Jazz has released material covering jazz (Ed Jones, Ulf Sandberg), soul (Brand New Heavies, Rose Windross, D-Influence), jazz rap (Humble Souls, Sandals), retro-kitsch (Corduroy) and dub (Hazardous Dub Company). Despite releasing a number of Latin-inspired albums, Snowboy produced a number of twelve inch singles reminiscent of 1970s soul, such as Lucky Fellow (with Noel Mckoy) and Girl Overboard (featuring Anna Ross).
The compilation double CD, The Story of Acid Jazz, chronicled some of the label's artists over the years. The label also released the "Rare Mod" series, a collection of rare 7" vinyl EP's from the 60's, presented in a picture sleeve.