"Babylon Sisters" was written by Walter Becker and Donald Fagen of Steely Dan, who are credited as both composers and lyricists. It is the opening track of Gaucho, the band's album released on 21 November 1980 by MCA Records. The album was recorded between 1978 and 1980 and produced by Gary Katz. It is described as yacht rock and jazz-rock, and as a concept album about would-be hipsters. The track is noted for drummer Bernard Purdie's "Purdie Shuffle", a half-time shuffle that he plays on the recording. Becker did not perform on the track. Its roughly 50-second fade-out took more than 55 mixing attempts by Becker, Fagen, Roger Nichols and Gary Katz. The song was released as a single in 1981.