This was the last album to feature John's regular touring band (Dee Murray and Nigel Olsson) on only a single song. Guitarist Davey Johnstone, who had recently joined the band, was featured on several cuts. Later band member, percussionist Ray Cooper, makes his first appearance with this album. As with all John songs during this period, the lyrics were penned by his writing partner, Bernie Taupin. This was the last album to be recorded at London's Trident Studios. Caleb Quaye and Roger Pope wouldn't play with John again until Rock of the Westies in 1975, following Murray and Olsson's departure from the band.
Madman Across the Water barely reached #41 on the UK Albums Chart, spending only two weeks there. It has been the lowest-charting album of his career to date. The album fared better in North America, peaking at #8 on the U.S. Billboard Top Pop Albums and placing at #10 on the year-end list of 1972. It received Gold by the RIAA in February 1972, achieving $1 million in sales at wholesale value just in the United States. In 1993, the album was certified Platinum, representing shipments of more than 1 million units in the U.S. In 1998, the album was certified Multi-Platinum, representing shipments of over 2 million units in the U.S.
The title song was set to be released on John's previous album Tumbleweed Connection. However, it was set aside and was re-recorded for this album. The earlier version (with Mick Ronson on guitar) was included on the remastered Tumbleweed Connection CD.
When it was released in 'The Classic Years' collection, it was the first album not to feature any bonus tracks. One known track recorded at the time, "Rock Me when He's Gone," was released on the 1992 compilation Rare Masters. The song was written for and recorded by one of John's long-time friends, Long John Baldry. This was John's first album in which he plays his piano and no other keyboards and the first album on which Johnstone played, a role that would continue for decades, and he contributed acoustic guitar, mandolin and sitar; he would join John's band full-time for Honky Château.
The SACD version of the album contained a longer version of "Razor Face", which extended the song-ending jam to 6:42 instead of the early fade on the original album. This extended version can only be heard in the 5.1 surround mix.