The album was originally intended as a solo album by the band's lead singer and main songwriter, Peter Hammill. When the band signed with Charisma Records, a deal was worked out whereby The Aerosol Grey Machine would be released under the Van der Graaf Generator name, in return for Mercury Records releasing Hammill from his earlier contract with it.
The Aerosol Grey Machine was released in September 1969 by record label Mercury. The initial edition contained the song "Giant Squid", later pressings removed this track and replaced it with the single b-side "Necromancer."
The album was reissued on CD in 1997 by the German company Repertoire Records, using the second ediiton running order of the album and featuring the first single as bonus tracks. Another 1997 release, by Peter Hammill's own UK record label FIE! Records, utilizes the original running order (taken from the original master tape) and adds the "Necromancer" b-side as a bonus track, along with a previously unreleased early version of "Ferret And Featherbird".
In his retrospective review, Steven McDonald of AllMusic called it "A raw, energetic effort that sometimes did little to show off the young Hammill's talents" that "nevertheless has some fine moments that hint at the possibilities for future releases."