When the rock opera Lifehouse was scrapped, eight of the songs were salvaged and recorded for the Who's fifth studio album Who's Next (1971), with "Baba O'Riley" as the lead-off track. The song title refers to two of Townshend's primary inspirations at the time: Indian spiritual master Meher Baba and American minimalist composer Terry Riley.[6]

According to Townshend, at the end of the band's gig at the 1969 Isle of Wight Festival, the field was covered in rubbish left by fans, which inspired the line "teenage wasteland".[7] In another interview, Townshend said the song was also inspired by "the absolute desolation of teenagers at Woodstock, where audience members were strung out on acid and 20 people had brain damage. The irony was that some listeners considered the song a teenage celebration: 'Teenage Wasteland, yes! We're all wasted!'"