The band brought in Sons of Champlin founder Bill Champlin as keyboard player and singer, to fill the past vocal parts of the late Terry Kath. The group also retained Chris Pinnick from the Chicago XIV sessions. Through the band's manager, Jeff Wald, and on suggestion of Danny Seraphine, producer David Foster would make contact with the band. Once they agreed to Foster producing the album (the band had considered him for 1980's Chicago XIV), the producer radically redefined Chicago's sound for the 1980s, with all of the latest technologies and techniques and introducing the significant use of outside songwriters and studio players. Three members of Toto lent their expertise to the sessions.
The soft rock leanings of Peter Cetera and David Foster permeate much of Chicago 16. The band was moving to a new label after an entire career at Columbia. Robert Lamm was also unavailable for the majority of the album's production because of personal issues, and the once-prolific writer only shared a sole partial writing credit on the release. Percussionist Laudir de Oliveira was dismissed from the band after the Chicago XIV tour, as his Latin-American style would not fit with the new direction of the band.
Upon its June 1982 release, Chicago 16 proved a hit album, especially as "Hard to Say I'm Sorry" became the band's second #1 US single, and the album ultimately went platinum, reaching #9. The single would also be included in its lengthier form "Hard to Say I'm Sorry/Get Away" on the "Summer Lovers" movie soundtrack. "Love Me Tomorrow", the second single lifted off the album, featured a lengthy orchestration at the end. A third single, "What You're Missing", was released, but failed to chart.
The Rhino remaster does not include the full-length versions of "What You're Missing" and "Love Me Tomorrow." The former was replaced with its single edit, and the latter had one piece removed near the end. However, it does include a Bill Champlin demo, called "Daddy's Favorite Fool", as a bonus track.
The original UK LP release contains "Rescue You" before "What Can I Say," unlike subsequent releases of this album.