The album was recorded at Davlen Sound Studios and Hollywood Sound Studios, Los Angeles. Among the accompanying musicians, David Paich, Jeff Porcaro, and David Hungate would go on to become band members in Toto. The album marked Scaggs's commercial zenith, a mix of straight pop rock songs ("Jump Street" and "Lido Shuffle"), smooth soul compositions ("What Can I Say" and "Lowdown"), and appealing ballads ("Harbor Lights" and "We're All Alone"). The latter was later a hit for Rita Coolidge.
"Lowdown" reached the top 5 on the club play, black, disco, and pop charts and also did respectably on the AC chart, with its peak at #3 on the pop chart. It earned a Grammy Award, as the Best R&B Song at the Grammy Awards of 1976, and the song is an airplay staple to this day, particularly on AC, oldies, and smooth jazz radio stations. "It's Over", "What Can I Say", and "Lido Shuffle" reached #38, #42 and #11, respectively, on the pop chart. Scaggs also received Grammy nominations for Album of the Year, Best LP Package, Best Pop Vocal by a Male, and Best R&B Vocal Performance by a Male for "Lowdown".
In a contemporary review for The Village Voice, music critic Robert Christgau praised the album as "white soul with a sense of humor that isn't consumed in self-parody." Alex Henderson of music database website Allmusic noted that Scaggs "hit the R&B charts in a big way with the addictive, sly "Lowdown" [...] and expressed his love of smooth soul music almost as well on the appealing "What Can I Say."" However, Henderson stated that "Scaggs was essentially a pop/rocker, and in that area he has a considerable amount of fun." He concluded: "Though not remarkable, the ballads have more heart than most of the bland material dominating that format."
On February 27, 2007, Silk Degrees was reissued by Legacy Records with three bonus tracks recorded live at the Greek Theatre on August 15, 1976.