In February 2012, Meek Mill revealed the album's title to be Dreams & Nightmares during his video blog. On May 14, 2012, in an interview with MTV, Meek Mill revealed the album, "ain't gonna be all over the place like the mixtapes. This album I'ma make it connect, I'ma try to perfect my craft a little more; make sure the flows touch the beats a little better, make sure the beats sound clearer." He also expressed a hope to have fellow rappers French Montana and Rick Ross appear on the album. During an interview with Billboard, he stated that he was recording "'two to three songs' per day in a studio recently installed on his tour bus." Meek Mill also revealed that he has a collaboration with Nas, entitled "Maybach Curtains", which may appear on the album. On the collaboration, he stated that, "Nas is one of the best rappers ever. Just having him in the studio, that's a big thing to me. I grew up listening to this guy. I came and I played the beat for him and he liked my music, so we just vibed out." He also added that when it comes to future collaborations for the album, "If I have a song that sounds like it fits Nicki Minaj the best or it fits T.I. the best, that's the people I would sort of lean towards getting on them songs. But it depends on how the songs fit the person." On July 25, an unfinished version of "Maybach Curtains" was leaked to the internet, prompting Meek Mill to take to Twitter and say, "Who leaked maybach curtains....I'm not letting nobody hear my shit at all!" During an interview with HipHopWired, Meek stated that, "As far as features on my album I might have the hottest guys in the game that I got on the [mixtape]: Kendrick Lamar, Drake, 2 Chainz...all them guys on the mixtape, so most likely they might be appearing back on the album, but I don't know for sure."Complex named the album cover the eighteenth best of 2012.
The album's lead single, "Amen" featuring recording artist Drake, was released on June 19, 2012. The song was first included on Mill's eleventh mixtape, Dreamchasers 2 (2012). Following the song's official release as a single, Philadelphia area pastor Rev. Jomo K. Johnson called for a boycott of Mill due to the lyrical content of "Amen". In a statement, he said that, "As a hip-hop fan, I want to encourage every rap fan in Philadelphia who is a believer in Jesus Christ, to boycott Meek Mill until he acknowledges this blatant disrespect. And being resident of North Philadelphia and pastor, I revoke Meek's 'hood pass' until this happens." On July 17, in an interview on the BET show 106 & Park, Mill stated, "I don’t think no preacher or no church approves of any type of rap music — because rap music, period, is a lot of bad stuff said. But at the end of the day, it's real life. And me, I wasn’t trying to disrespect no religion or anything like that."
The album's second single, "Burn" featuring Big Sean, was released on September 11, 2012. The song was also included on Dreamchasers 2.
On June 21, 2012, Meek Mill announced he would be going on a Dreamchasers Tour starting on August 2 and ending on August 27 to promote the album. After originally being scheduled for release on August 28, the release was pushed back to October 30. On October 10, Mill previewed the album in New York City for industry insiders including Jay-Z and Will Smith. On October 24, the whole album was leaked online. Meek Mill responded to it by stating, "I ain't tripping. If people wanna buy your album, they're gonna buy your album whether it's gonna leak or not." On October 17, 2012, Mill premiered "Maybach Curtains", on the website Rap Genius. The song features guest vocals from recording artists Nas, Rick Ross and John Legend.
At Metacritic, which assigns a normalized rating out of 100 to reviews from mainstream critics, the album received an average score of 69, which indicates "Generally Favorable Reviews", based on 17 reviews.XXL's Ralph Bristout noted at the end of his review "Dreams and Nightmares doesn’t break new grounds in hip-hop, however it does serve as a respectable release from the rapper who’s on the verge of universal acceptance—a road similarly traveled by his cohorts Rick Ross and Wale." Village Voice's Sowmya Krishnamurthy dubbed it "the perfect balance of street rap and commercialism." Marcus J.Moore of BBC music noted that "The Philadelphia rapper opts for brutal honesty on debut LP" and stated that "It’s an intricate depiction of the young rapper: Mill doesn’t shy away from his chequered past; he reflects upon it to explain the person he’s become. The compositions are pretty formulaic and the lyrics aren’t overly technical. Still, it works for Mill as a respectable effort that exorcises personal demons and moves him beyond illicit history. He had to grind like that to shine like this." However Edwin Ortiz of HipHopDX wrote "With 'Dreams & Nightmares' it's clear that Rick Ross' protege Meek Mill needs more time before he can rightfully call himself the lieutenant of the MMG army. With that said, consider this project a dream that could be forgotten by mid-day." Def Pen Radio's Alex Smith called Dreams & Nightmares "impressive", stating "Meek has found a way to take a gritty street flow and apply it to rich production and appeal to a commercial audience". He criticized the album for its inclusion of tracks previously released, saying, "While some fans may be happy to see these songs again, it’s hard to get excited to pay for something that we’ve already been presented with in the form of a free download."
The album debuted at number 2 on the US Billboard 200 chart with first-week sales of 165,000 copies in the United States. In its second week the album sold 41,000 more copies dipping to number 8 on the chart. As of April 17, 2013, it has sold 347,000 copies in the United States.