The pair were later hired to produce a soundtrack for a 1971 low-budget movie called You Gotta Walk It Like You Talk It,, and were joined in the effort by vocalist Kenny Vance and drummer John Discepolo. Guitarist, Denny Dias also contributed to these sessions and he joined Fagen and Becker on their next project, which evolved following an alliance with producer Gary Katz, who suggested they form a band in order to have more of their songs recorded. In an era of outrageous band names, they chose Steely Dan from the steam-powered dildo in William Burroughs' novel The Naked Lunch. The trio was quickly expanded by the arrival of vocalist David Palmer, guitarist Jeff 'Skunk' Baxter and drummer Jim Hodder.
Their first album in 1972, "Can't Buy A Thrill", was completed within weeks, but drew considerable critical praise for its deft melodies and immaculate musicianship. With overtones of Jazz, Blues and Soul, the unusual album was a surprise success, spawning two Top 10 singles, "Do It Again" (#6 in 1973) and "Reeling in the Years" (#11 in 1973). Unfortunately the band's first tour was a disaster, prompting Palmer to quit the band. Steely Dan's 1973 follow-up, "Countdown To Ecstasy", was a commercial failure, despite praise from critics. That situation was reversed with the release of "Pretzel Logic", Steely Dan's first U.S. Top 10 album. Here, Fagen and Becker drew more fully on their love of Jazz, and the single from the album, "Rikki Don't Lose That Number" went to #4 in the U.S. during the Summer of 1974.
The band's internal conflicts simmered over a reluctance to tour, shown by Becker and, especially, Fagen, who was unhappy with the in-concert role of front man. Steely Dan's final live appearance was on July 4th, 1974 and ensuing strife resulted in the departures of both Baxter and Hodder. Baxter resurfaced in The Doobie Brothers, with whom he was already guesting, while Hodder reverted to session work. Fagen, Becker and Dias were soon joined by newcomers Michael McDonald on keyboards and vocals, and Jeff Porcaro on drums for "Katy Lied", which also featured cameos by guitarist Rick Derringer (formerly of The McCoys) and saxophonist Phil Woods. The album however, sold poorly with no tour to back it up.
McDonald was offered a chance to join The Doobie Brothers, where he would go on to sing lead on several of their later hits, including "What A Fool Believes" and "Minute By Minute". Dias and Porcaro found work as studio musicians. Fagan and Becker continued on, and scored their only Top Twenty hit in Britain, "Haitian Divorce". Their next album "Aja", continued in a similar vein, where an array of quality musicians brought perfection to a seemingly effortless, Jazz/Disco style. The album was a critical and commercial success, reaching the Top 5 in the U.S. and became their first Platinum record, producing the hit single, "Peg", which reached #11 in America in early 1978. A similar pattern was unveiled on 1980's "Gaucho", the release of which was marred by conflict between the band and record label over escalating recording costs. The company's nervousness was calmed when the album achieved Platinum sales and the single, "Hey Nineteen", reached #10 in America.
Time and business hassles had by now taken their toll, and Becker and Fagen tired of their creation. In June 1981, they announced the break-up of their partnership. Fagen released "The Nightfly" in 1984, a superb album which continued where Steely Dan left off. He also wrote tunes for other artists including Diana Ross, Manhattan Transfer, Jennifer Warnes and The Yellowjackets. He co-produced the soundtrack album for the musical The Gospel At Colonus, and composed the score for the film, Bright Lights, Big City. He also wrote a column for Premiere magazine. Becker produced albums for China Crisis, Rickie Lee Jones, and various Jazz artists, including Bob Sheppard, John Beasley, Jeff Beale, Andy Laverne, Marty Krystall, The Lost Tribe, Dave Kikoski, and Lee Ann Ledgerwood.
In 1993, Donald Fagen released a second solo album, "Kamakiriad", a Steely Dan-sounding effort produced by his old friend Walter Becker. While working together on the record, Fagen and Becker talked about re-starting Steely Dan. Less than a year later a reunion album, "Citizen Steely Dan", was in stores and the notoriously reclusive band mounted its first tour in nearly twenty years. The pair continued to appear and record as Steely Dan and in May, 1994, toured Japan and released an album called "11 Tracks Of Whack", followed in 1995 by "Alive In America". The comeback became complete when an album they called "Two Against Nature", that started to take shape in 1997, was released in March of 2000. On February 22, 2001, Steely Dan and "Two Against Nature" won four Grammys, winning in all categories in which they were nominated: Album of the Year, Best Pop Vocal Album, Best Pop Vocal Performance By A Group (for "Cousin Dupree") and Best Engineered Non-Classical Album. On March 19th of that year, Becker and Fagen were inducted into the Rock And Roll Hall Of Fame.
In 2003 Steely Dan released the "Everything Must Go" album, and supported it with a tour across America. After Fagen took some time to promote his solo album, "Morph the Cat", the band set out on a 33-date tour in the Summer of 2006, The Heavy Rollers Tour began May 5th, 2007 and took them to Europe, Japan, Australia, and New Zealand, making it the largest Steely Dan tour ever. In early March, 2008, the group announced on their website that they would be playing the Montreal Jazz Festival in July. This developed into a full Summer tour of Canada and the U.S. In 2009 they were booked for shows extensively in Europe and North America, alternating one-date concert appearances with multi-night theater shows. In February, 2011, Steely Dan announced a U.S. tour called Shuffle Diplomacy Twenty Eleven with The Miles High Big Band, featuring The Embassy Brats. Australia and New Zealand were later added to the schedule, which was highlighted by an appearance with Steve Winwood that November. Fagen released a fourth solo album, "Sunken Condos", in 2012. The duo was back together again for shows across America in 2013, 2014 and 2015. For 2016, The Dan Who Knew Too Much tour was scheduled to kick off in April and extend into July. 2017 brought more live appearances and several shows booked at The Venetian in Las Vegas.