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 originated 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.
In 1991 the genre broke into the mainstream with the success of Brand New Heavies. After one eponymous album (1990) with Acid Jazz Records the group moved on to FFRR Records for their hit singles "Never Stop" and "Dreams Come True". Other bands included Incognito and Us3, whose "Cantaloop (Flip Fantasia)" (1993) was the biggest hit in the genre. Also highly successful were Jamiroquai, who, having been an early signing for Acid Jazz Records, signed for Sony Music for their highly successful album Travelling Without Moving (1996), which spawned the international hit single "Virtual Insanity". Other live acts included Stereo MC's and the James Taylor Quartet. The initial mainstream success of acid jazz was followed by a large number of compilations that left the public confused as to the nature of and key performers in the genre.