The band's two concerts at the Lyceum Theatre, London, on 17th and 18 July 1975, were recorded using the Rolling Stones Mobile Studio. The tracks for the album were selected mostly from the 17th July performance, with "Lively Up Yourself" (which wasn't played on the 17th) from the 18th. Chris Blackwell had been at the first concert on the 17th, and had noted the audience's reaction to "No Woman, No Cry".
The album was released on 5 December 1975 by Island Records as a vinyl LP. In 2001 it was released on CD. In 2016 a three disc release called the "Live! Deluxe Edition", became available in vinyl and CD formats, with recordings of both the 17 July and 18 July performances.
Reviewing Live! in Christgau's Record Guide: Rock Albums of the Seventies, Robert Christgau wrote, "The rushed tempos take their toll in aura: 'Trenchtown Rock' can be far more precise, painful, and ecstatic; like most live albums this relies on obvious material. But the material is also choice, unlike most live albums it's graced by distinct sound and economical arrangements, and the tempos force both singer and the band into moments of wild, unexpected intensity. I used to think Natty Dread's 'No Woman, No Cry' was definitive."