By 1986, The Bats had released three critically acclaimed EPs, but still had not released a full-length album. While touring in the U.K. that year, an acquaintance in Glasgow offered the use of his home 8 track studio. Half of the tracks for what would become Daddy's Highway were recorded there.
Upon their return to New Zealand, recording was completed at Nightshift in Christchurch, and the album was released by Flying Nun in 1987. "Block of Wood" was released as a 7" vinyl single.
Daddy's Highway is often cited as The Bats' most highly regarded album, and is considered one of the best New Zealand albums of the 1980s. In 2000, it was named #88 in music magazine Rip It Up's New Zealand's Top 100 Albums of All Time. Notable tracks on the album include "North By North", "Tragedy" and the lead single, "Block of Wood", all of which were staples on New Zealand student radio.
In October 2010, Flying Nun reissued Daddy's Highway. The album was remastered by Paul Kean, and five bonus tracks were added. "Calm Before The Storm" and "Candidate" were the B-sides to the "Block of Wood" single, and the remaining three songs were from the band's early EP Made Up in Blue .