Dylan's lyrics affectionately ridicule a female "fashion victim" who wears a leopard skin pillbox hat. The pillbox hat was a popular, highly fashionable ladies' hat in the United States in the early to mid-1960s, and was most famously worn by Jacqueline Kennedy Onassis. Dylan satirically crosses this accessory's high-fashion image with leopard-skin material, perceived as considerably more downmarket and vulgar. The song was also written and released long after pillbox hats had been at the height of fashion, something that was very apparent to listeners at the time.
The song has been widely speculated[by whom?] to be inspired by Edie Sedgwick, an actress/model known for her association with Andy Warhol. Sedgwick is also often suspected[by whom?] as being an inspiration for other Dylan songs of the time, particularly some from Blonde on Blonde.
The song melodically and lyrically resembles Lightnin' Hopkins "Automobile Blues", with Dylan's opening line of "Well, I see you got your brand new leopard-skin pill-box hat," echoing Hopkins' "I saw you riding 'round in your brand new automobile," and the repeated line of "...brand new leopard-skin pill-box hat," melodically descending in the same manner of the Hopkins refrain "...in your brand new fast car". The Dylan reference to "the garage door" in the final verse of "Leopard-Skin Pill-Box Hat" may also be an allusion to the automobile of Hopkins' song.
Bob Dylan began to include "Leopard-Skin Pill-Box Hat" in his live concerts with The Hawks in late 1965, and the song was one of the first compositions attempted by Dylan & the Hawks when in January 1966 they went into Columbiarecording studios in New York City to record material for the Blonde On Blonde album. The song was attempted on both January 25 (2 takes) and January 27 (6 takes), but no recording was deemed satisfactory (one of the takes from January 25 was released in 2005 on The Bootleg Series Vol. 7: No Direction Home: The Soundtrack).
Frustrated with the lack of progress made with the Hawks in the New York sessions (only one song, "One of Us Must Know (Sooner or Later)", had been successfully realized), Dylan relocated to Nashville, Tennessee in February 1966, where the evening of the first day of recording (February 14) was devoted to "Leopard-Skin Pill-Box Hat". Present at the session were Charlie McCoy (guitar/bass), Kenny Buttrey (drums), Wayne Moss (guitar), Joseph A. Souter Jr. (guitar/bass), Al Kooper (organ), Hargus Robbins (piano) and Jerry Kennedy (guitar). Although earlier in the day Dylan and the band had achieved satisfactory, album-destined takes of "Fourth Time Around" and "Visions of Johanna", none of the 13 takes of "Leopard-Skin Pill-Box Hat" recorded on February 14 were to Dylan's satisfaction. Dylan soon left Nashville to play some concerts with the Hawks, though he returned in March for a second set of sessions. A satisfactory take of "Leopard-Skin Pill-Box Hat" was finally achieved in the early hours of March 10, 1966 by Dylan along with Kenny Buttrey, Henry Strzelecki on bass, and the Hawks' Robbie Robertson on lead guitar (though Dylan himself plays lead guitar on the song's opening 12 bars).