"Dance the Night Away" was Van Halen's first top 20 U.S. hit, peaking at #15, and the second song from their 1979 album Van Halen II. While the rest of the songs from this album had existed in various forms since their days doing demos and playing clubs, this song was possibly the only song written during the recording sessions for the album. The band members conceived the song during the recording sessions while they were standing in a circle humming to each other. It was inspired by Fleetwood Mac's "Go Your Own Way". Eddie Van Halen purposely left a guitar solo out of the final version of the song, replacing it instead with a riff of tap harmonics. David Lee Roth originally wanted to call the song "Dance Lolita Dance", but Eddie convinced him that "Dance the Night Away" was more suitable and the chorus was changed to reflect that.
Roth claimed, during a 2006 performance in San Diego, California, that he wrote this song in tribute to an intoxicated woman who was having sex in the back of a truck and ran with her pants on backwards while escaping police officers into the bar where the fledgling band was playing. This was also mentioned at a 2006 performance in Detroit, Michigan.
The song has been a permanent fixture in the Van Halen concert set-list since the 2007 reunion with Roth. It was not played at all during the Sammy Hagar era but did get played during the VHIII tour in 1998.