Alibi, released in August 1980, was the first America album not to feature a picture of the band members on the cover. Instead, the cover sported a picture of a doll's head in the foreground of a desert landscape. Dewey Bunnell said he chose the picture while looking through the archives of acclaimed photographer Henry Diltz. The album was also unusual in the era of vinyl primacy in that it did not have numbered sides. Because the group and Capitol disagreed on which side would be side one, they agreed on a compromise: the sides would be labelled "Our Side" and "Their Side."
The album only peaked at number 142 on the Billboard album chart in the US. No singles charted in the US, but in Italy "Survival" was a top 10 hit and the whole album peaked at 4: this happened only on the first weeks of 1982, after the band took part, as special guest, at the Sanremo Music Festival.
Although Alibi was yet another commercial disappointment for America, the band's fortunes would dramatically improve with their next album, View From The Ground (1982), which included the Top Ten smash, "You Can Do Magic."
McCauley would later produce several tracks on America's Perspective album in 1984, while Mollin returned in 2011 to produce America's cover album, Back Pages.
In his Allmusic retrospective review, music critic Steven Thomas Erlewine summarized that "Essentially, the album picks up where Silent Letter left off, meaning that it's a set of pleasant soft pop, but it's slicker and slighter than its predecessor." He criticized the album's uneven content and thin production, holding up its successor, View from the Ground, as a superior work in the same vein.