Frontman Alex Kapranos stated in an interview to the UK magazine Boyz that the song was written about two friends of his — "It was one night when me and the band were out with friends from Glasgow, and we went to this warehouse dance party thing called Disco X. It was a very debauched night and these two friends got it together in a very sexy way." The band usually performs a slightly different version of the song at concerts, most notably with the final "Come and dance with me" replaced by the more risqué "Come all over me" (this alternative lyric is in the liner notes, but crossed out and with the recorded lyric written beside it.) Also, "stubble on my sticky lips" is occasionally replaced with "stubble on my sticky hips."
Reviewer Alexis Petridis praised the song's "intriguing combination of sly humour and bug-eyed lust, as if the song's central character started camping it up for a laugh and ended up in rather deeper water than he had anticipated...You simply don't get songs like Michael very often in current rock music."
The song contains a secret message from 1:35 to 1:39 saying, "She's worried about you, call your mother", if played backwards. According to "franzferdinand.net," bassist Bob Hardy was getting a bit worried about calling his mother back home, so the band added the backwards lyrics in as an homage. But Bob Hardy has said that he has no knowledge of the lyrics being there and he thought it was just a positive message to put on the track.
The song was released as a single in the UK on 16 August 2004. Due to a breach of UK chart rules by providing three tracks on the CD2 format instead of two, in what the band described in a press statement as a "silly schoolboy error", sales of the original CD2 format were disqualified. The disc was withdrawn within a day of release, to be replaced by the end of the week by a two-track version, omitting "Tell Her Tonight (Paul Sings)". This track was released as a free download from Franz Ferdinand and Domino Records' websites from 17 August. Despite this, the single still reached number 17 in the UK and number 39 in Ireland.
A music video was also recorded for the song, with the band members playing at an underground dance club. The occupants of the dance club dance as if they are short videos of a dance being played and replayed over again. During the final chorus the band members are given extra limbs or additions to their instruments while the video ends in a swirl of dancing boys and shots of the band.
The song was recorded alternatively in May 2004 in Hamburg, Germany as a duet and originally intended for release as a single. Without changing the lyrics, the reworked track was meant to take the perspective of a male love interest and female love interest fighting over Michael. Catriona Shaw of the band Queen of Japan provided the female vocals of this version of the track. In the end the band felt that the homoerotic undertones of the song became too diluted, so decided not to use it for the release of the track as a single and stuck with the original album version.