20 Jazz Funk Greats is the band's first fully studio album, as prior albums contained both live and studio recordings. The production is credited to "Sinclair/Brooks". The album was recorded on a 16-track borrowed from Paul McCartney.
The album's cover photograph was taken at Beachy Head, a chalk headland on the south coast of England, close to the town of Eastbourne in the county of East Sussex, and one of the world's most notorious suicide spots. In a 2012 interview, Cosey stated:
We did the cover so it was a pastiche of something you would find in a Woolworth’s bargain bin. We took the photograph at the most famous suicide spot in England, called Beachy Head. So, the picture is not what it seems, it is not so nicey nicey at all, and neither is the music once you take it home and buy it. We had this idea in mind that someone quite innocently would come along to a record store and see [the record] and think they would be getting 20 really good jazz/funk greats, and then they would put it on at home and they would just get decimated.
On the 1981 Fetish Records issue of the release an apparently dead and naked male body lay in front of the band on the album cover.
Pitchfork described the album's style as such: "In a smash and grab that testifies to both increased musical ambition and a relentless urge to wrongfoot audience expectations, 20 Jazz Funk Greats finds the band waking up from D.O.A's dark night of the soul and feeling curiously frisky. Snacking on not only the titular funk and jazz, the band also takes touristic zig zags through exotica, rock and disco", ultimately describing it as a "kitsch detour toward mutant disco".