Early in 1992, Jonathan Poneman of Sub Pop contacted Gary Gersh, who had previously signed Nirvana to Geffen Records, to inform him that Sub Pop still had a number of unreleased early Nirvana recordings in their possession. The band had originally intended to release the material via Sub Pop and cynically called it Cash Cow. However, Sub Pop could not match Geffen's distribution network, and the band felt that getting the material maximum exposure was important. Sub Pop sold the recordings to Geffen for "a six-figure amount" on the condition that the band would create and approve the release of an album by Christmas 1992.
At the time, the majority of the material on Incesticide was circulating within fan communities (albeit in lower quality). It was widely reported in the music press that the band wanted to offer fans a higher-quality alternative. In the book Cobain Unseen, Charles R. Cross writes that Kurt Cobain agreed to the release of this compilation because he was allowed complete control over the album's artwork.
Since the songs were recorded in different sessions and some were recorded when Nirvana did not have a stable formation, the album includes recordings by four different drummers: Chad Channing, Dan Peters, Dale Crover, and Dave Grohl.
The songs "Hairspray Queen", "Aero Zeppelin", and "Big Long Now" were officially unreleased at the time, as well as the versions of "Been a Son", "Aneurysm", and "(New Wave) Polly", which are different from the versions previously released on the Blew EP, the "Smells Like Teen Spirit" single, and the Nevermind record, respectively.
"Downer" appears on the CD version of Nirvana's 1989 debut album Bleach but was only included from the 1992 reissue onwards.
"Dive" and "Sliver" were released on the "Sliver" single in 1990. "Dive" was also previously released on The Grunge Years compilation album in 1991.
The cover art was painted by Cobain, who is credited as Kurdt Kobain in the liner notes. The rubber duck seen on the album's back cover also belonged to Cobain. The front cover prominently displays a poppy, hinting at Cobain's struggle with heroin addiction.
The first several pressings of the album contained liner notes written by Cobain. Versions of the album containing the liner notes by Cobain could be found at record stores as late as 1998. Initial copies in the U.S. and Canada also contained a Parental Advisory label.
The album received generally positive reviews. "Nobody really wants a Hatful of Hollow-type assortment of Peel/Goodier sessions, b-sides, demos and obscurities in the place of a proper studio album," observed Andrew Perry in Select. "But, hell, wouldn't you try and put an end to the consumer madness going on in your name? And harvest some of the money for yourself? Anyway, people might start talking about the music again…" In a review for AllMusic, music critic Stephen Thomas Erlewine said that the song "Aneurysm" was "perhaps the greatest single song the group ever recorded".
Incesticide was released on December 14, 1992 in the United Kingdom, and on December 15, 1992 in the United States. The record label, Geffen, decided against heavily promoting the album, possibly to avoid a "Nirvana burnout" as the band had released Nevermind and four singles in the preceding fifteen months. Despite this lack of promotion and being a collection of old and new material, Incesticide debuted at number 51 in the Billboard 200 and sold 500,000 copies in two months. The album is certified Platinum by the Recording Industry Association of America. On November 23, 2012, Incesticide was re-released on vinyl as a limited two LP 45 RPM edition for its 20th anniversary.
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