As a young man Cudi moved from his hometown of Cleveland, Ohio, to Brooklyn in New York City, to pursue a music career. Upon his arrival, he stayed with his uncle. His uncle later kicked him out, which subsequently led to Cudi writing "Day 'n' Nite":
"My uncle that I lived with passed in 2006. We were actually beefing because he forced me out the house when I didn’t have another situation set up, so I was bitter. I never apologized for it, and that kills me. That’s why I wrote "Day 'n' Nite." If he wasn’t there to let me stay with him those first few months, there would be no Kid Cudi. It fucked me up watching him go, but it was like, "I have to fulfill this destiny now for sure." Things were moving but they weren’t solidified yet. I had "Day ’n’ Nite," we were just getting started, and I was like, "This shit has got to pop off." I wasn’t taking no for an answer."
On Cudi's debut album Man on the Moon: The End of Day, the song is listed as "Day 'n' Nite (Nightmare)", following the album's dream sequence. In 2012, in an interview with Complex, Kid Cudi revealed that the 1991 single "Mind Playing Tricks on Me" by Southern hip hop group The Geto Boys, also inspired him to write and record "Day 'n' Nite", saying: "My Mind Playing Tricks On Me is my favorite song in the world. I love it so much I wanted to make my own version of it. And then 'Day 'N' Nite' came out of it."
The single was released February 5, 2008, as a digital download. It was released prior to Kid Cudi's signing to the GOOD Music label. The song initially appeared on Cudi's first official project, a mixtape titled A Kid Named Cudi, released in July 2008, in collaboration with New York street-wear brand 10.Deep as a free download. The mixtape caught the attention of Kanye West, whose then-manager Plain Pat, had introduced Cudi's music to him, subsequently leading West to sign Cudi to his GOOD Music imprint later that year.
"Day 'n' Nite" was remixed in June 2008, by Italianproduction duo Crookers and was released as a single in the UK on January 12, 2009. The Crookers Remix was a commercial success, peaking at number 2 on the UK Singles Chart and entering within the top 20 in various European charts. This remix became a digital release also, through Fool's Gold Records. The remix received mass popularity throughout the European continent. It was song of the week on Belgian radio station Studio Brussel. A video was released for this version of the song, that Cudi expressed displeasure with and it was released without his permission. He issued an explanation on his blog and asked that all bloggers remove the video from their blogs. The Crookers remix debuted at #2 in the United Kingdom, being beaten off the top spot by Lady Gaga's "Just Dance" having retained its position for 3 weeks. The Crookers remix is often played during his concerts, as a continuation of the original version. The remix won an award at the Beatport Music Awards of 2009 for 2007 tracks under the category Best Indie Dance / Nu Disco track of 2007.
There were three music videos filmed for "Day 'n' Nite". The first, a pop art style video, was directed by the French director So-Me, who previously worked on music videos with a similar style such as Justice's "D.A.N.C.E." and Kanye West's "Good Life". The pop art music video was produced by Imetrages and also features a brief cameo appearance from Travis Barker. It features Cudi walking around Los Angeles, doing a variety of mundane activities such as getting a slice of pizza, grocery shopping, or visiting a bar, but the overlay of graphic colors on top of the actual video disguises or transforms the daily scene into one of fantasy. These fantasized versions of reality reference the film The Wizard of Oz and later manifest Cudi's desire to perform music; ultimately they play on the song's theme of the "lonely stoner" whose quotidian existence transforms because of his ability to "free his mind." The video features interior and exterior shots of Los Angeles bar, The Smogcutter (located on Virgil) and the somewhat iconic video game arcade, "Family Arcade" (located on Vermont in Hollywood). The music video ranked at number 10 on BET's Notarized: Top 100 Videos of 2009 countdown. It has received over 97 million views on YouTube.
The second version was made specifically for the "Crookers Remix" of the song. It features Cudi as an employee at a typical British corner shop called "Day 'n' Nite", with a reference that he smoked marijuana after his manager left him with the keys. Throughout the video, Cudi has several hallucinations, such as women taking off their clothes, or dancing for him. A minor joke in the beginning is the manager character mispronouncing the name Budi (Cudi's character), a reference to the popular media confusion regarding the pronunciation of "Cudi", as many people pronounced it "Kid Cooty" when he first emerged. Curiously, all products are British and pricing on the shelves is in pounds Sterling but pricing on labels behind the till are in Dollars. The police woman is also in an American police uniform.
The third video that was released (also for The Crookers remix) was actually shot before the others in 2008, by New York directing duo, BBGUN. The video was made before Cudi was signed with Universal Motown on a budget of $250. It was BBGUN's directorial debut and was premiered on Pitchfork on September 9, 2009.