Acid jazz consisted of two related movements. The first was based on records released by DJs and producers that included rare jazz tracks, particularly from the 1960s and 1970s, often mixing them with percussion tracks and electronic dance beats. The second were groups influenced by these recordings and who emphasised a groove-based approach to music. Acid jazz uses elements of jazz, funk and hip-hop. Because of its existence as a percussion-heavy, primarily live music, it was closer to jazz than any other dance style, but its focus on maintaining a groove allied it with funk, hip-hop, and dance music. The style is characterized by danceable grooves and long, repetitive compositions. Typical ensembles include horns, a full rhythm section (often with a drum set and additional percussion), a vocalist that may sing and rap and often a DJ.
Acid jazz has its origins in the 1960s, when psychedelic styles were being incorporated into other musical genres, jazz being one of these. Some cite "Six Pack" and "Soul Fiesta" by The Apostles (1969) as acid jazz records during the 1960s .
Acid jazz became popular in the London club scene of the mid-1980s, with DJs of the rare groove movement, who played obscure jazz records. Their main interests were in the fringe of jazz fusion, jazz funk, and with lesser input from soul jazz of the 1950s and 1960s. Particularly significant were records from the Blue Note catalogue.
These DJs included Gilles Peterson, who had residencies at several London clubs in the 1980s, began in his own small pirate radio station and then moved to the much larger Kiss-FM. In 1988 with producer Eddie Piller he formed the label Acid Jazz Records. The first release from the company was the compilation Totally Wired, which contained obscure jazz funk tracks from the 1970s with updated new tracks. In 1990 Peterson left to found his own label Talkin' Loud at Phonogram. The company signed acts such as Galliano, Young Disciples and Urban Species. Another British record label, Fourth And Broadway Records, was formed in 1990 and began a compilation series with the title "The Rebirth of Cool". Artists included Pharoah Sanders, Stereo MCs, the French rapper MC Solaar, Japanese production team United Future Organization and saxophonist Courtney Pine.