Former Motown Records producer Norman Whitfield had been commissioned to record the soundtrack album for Car Wash by director Michael Schultz. Although Whitfield did not want to assume the project, he decided to do so, both for financial incentives as well as the chance to give Rose Royce, a disco/funk backing band that Whitfield signed to his own label in 1975, the exposure they needed to become mainstream. Unable to develop a theme song for the film, inspiration finally struck Whitfield while watching a game of basketball, and he allegedly wrote his first draft of "Car Wash" on a paper bag from a fried chicken eatery. 
The resulting song set the mood and tone for the comedy film it was commissioned for. Rose Royce lead singer Rose Norwalt (Gwen Dickey), with brief assistance from guitarist Kenji Brown, describes a fun and easy-going car washing business, where everything is "always cool/and the boss don't mind sometimes if you act a fool."
The Car Wash soundtrack, a double album, was Rose Royce's debut album, and the title track was their debut single. "Car Wash" sold two million copies, and was a number one success on both the Billboard popular and R&B charts in the United States and a top ten success in the United Kingdom. The song held the number-one spot on the Billboard Hot 100 for one week, from January 23 to January 29, 1977, replacing "I Wish" by Stevie Wonder and replaced by "Torn Between Two Lovers" by Mary MacGregor. The Car Wash soundtrack album, entirely recorded by Rose Royce and Whitfield, spawned two more successful singles: "I Wanna Get Next to You" and "I'm Going Down" (later covered in 1994 by Mary J. Blige).
In 1998, "Car Wash" was remixed and interpreted in a duet with Gwen Dickey. Officially titled "Car Wash '98", the release also carries the alternative title "Car Wash '98 (The Monday Nightclub Mixes)", as the group Monday Nightclub was involved in the mixing.
In 2004, American singer Christina Aguilera featuring rapper-singer Missy Elliott recorded a cover version of "Car Wash", giving the disco song a more modern feel and adding rapped verses from Elliott. In an interview Aguilera said, "We had to change the key to be a little bit higher for my range. So we couldn't take the exact samples, but we brought in all these live instruments to recreate kind of this old, old classic, soulful feel and sound...."
"Car Wash" was the only single from the soundtrack to DreamWorks' computer animated film Shark Tale. Aguilera and Elliott's cover of "Car Wash" missed the U.S. Billboard Top 40, peaking at number sixty-three, while becoming a top five hit in the United Kingdom and became the 48th best selling single in the United Kingdom of 2004 with sales of over 100,000 copies. In this context, the "car wash" the song refers to would be the place where Oscar (the main protagonist, voiced by Will Smith) works, where large sea animals who behave like cars are washed in the same manner. The single has sold over 1.5 million copies worldwide.
The music video to Aguilera's version shows her and Elliott as animated fish similar to those in the film, combined with scenes of Aguilera and Elliott recording the song in a recording studio. The video also includes scenes of Shark Tale. The scenes of Aguilera and Elliott recording the song in the studio were shot by Rich Newey, while the scenes of Aguilera as a jellyfish and Elliott as a fish were edited by Peter Lonsdale and John Venzon, who also edited Shark Tale.
^In 1988, a re-released version of "Car Wash" released with the B-side "Is It Love You're After" charted at number 20 on the UK Singles Chart. In 1998, a re-released version of "Car Wash" featuring Gwen Dickey peaked at number 18 on the chart.