The album was the last produced while Brendan Perry and Lisa Gerrard were a romantic couple. A majority of the album was recorded in a multi-storey apartment block in the Isle of Dogs, London.
On the album's title, Perry notes, "In a lot of aerial photographs of the Earth, if you look upon it as a giant organism—a macrocosmos—you can see that the nature of the life force, water, travels in a serpentine way."
On the album, AllMusic wrote, "Perry and Gerrard continued to experiment and improve with The Serpent's Egg, as much a leap forward as Spleen and Ideal was some years previously", heaping particular praise on the album opener "The Host of Seraphim", which it called "so jaw-droppingly good that almost the only reaction is sheer awe." Rock critic Piero Scaruffi held this album in higher praise than the band's previous (Within the Realm of a Dying Sun), which he called "ambitious but unfocused", and commented that during the 1990s, following Serpent, "[Dead Can Dance] indulged in trivial repetitions of their least original ideas".