"All the Right Friends" is one of the earliest songs written by R.E.M.

The song was recorded for Murmur in 1983, but was left off the album. In the early-'90s, R.E.M.'s former label I.R.S. Records re-released their b-side compilation album Dead Letter Office with bonus material - the version of this song recorded for Murmur and an acoustic version of "Gardening at Night".

In 2001, director Cameron Crowe released the movie Vanilla Sky, starring Tom Cruise. R.E.M. were approached with the idea of them contributing a rock song to the soundtrack. According to Peter Buck, they were approached "about eight days before they needed it", and they had loads of material left from Reveal, but they wanted a rock song, and their manager Bertis Downs had liked "All the Right Friends", so they recorded it. Slightly different from the other version (with most of the original lyrics missing), the song was, in Peter Buck's vision, recorded as if they were recording it for the Chronic Town EP, as Buck noted on the sleeve notes to the band's 2003 In Time compilation album.

The song was recorded on October 23, 2001, in Seattle's Bad Animals Studio's "Studio X" while R.E.M. were in town for a performance at the Groundwork Benefit the previous day and, that evening, at the Crocodile Café. On an R.E.M. special of The South Bank Show, which aired in May 2002 on the UK's ITV, Buck is seen recording a guitar overdub for the song, then, upon completion, the camera follows him into the control to evaluate the recording.

It is included on R.E.M.'s Warner Bros. Records 2003 compilation, In Time: The Best of R.E.M. 1988-2003. In addition, an earlier version of the song appears on EMI's 2006 compilation, And I Feel Fine... The Best of the I.R.S. Years 1982-1987 on their I.R.S. Records label. It is also included on the Vanilla Sky soundtrack, along with Sweetness Follows.