The Velvet Underground & Nico is the debut  by  band  and vocal collaborator . It was originally released in March 1967 by .

Recorded in 1966 during 's   event tour, The Velvet Underground & Nico would gain notoriety for its  performance sensibilities, as well as its focus on controversial subject matter expressed in many of their songs.

Though largely ignored upon release, the record has since become one of the most influential and critically acclaimed  albums in history, appearing at number thirteen on  magazine's list of the  as well as being added to the 2006  by the Librarian of Congress.

The Velvet Underground & Nico was recorded with the first professional line up of The Velvet Underground, including , ,  and ; with , who would occasionally sing lead with the band at the instigation of their and manager, . Nico would sing lead on three of the album's tracks—"", "" and ""—and back up on "". In 1966, as the album was being recorded, this was also the line up that would perform live as a part of Warhol's .

The bulk of the songs that would become The Velvet Underground & Nico were recorded in mid-April, 1966, during a four-day stint at, a decrepit  in . This recording session was financed by Warhol and ' sales executive Norman Dolph, who also acted as an  with John Licata. Though exact total cost of the project is unknown, estimates vary from 1500 to $3000.

Soon after recording, Dolph sent an  of the recordings to Columbia in an attempt to interest them in distributing the album, but they declined, as did  and . Eventually, the -owned  accepted the recordings with the help of Verve staff producer , who had recently moved from a job at Columbia.

With the affirmation of a label, three of the songs, "", "" and "", were re-recorded in two days at T.T.G. Studios during a stay in  later in 1966. As the record's release date was bumped back time after time because of production problems, Wilson also took them into a New York studio in November 1966 to add a final song to the track listing: the single "". The production on that song is far more professional and lush, aimed as it was at radio playtime.

The Velvet Underground & Nico is sometimes referred to as the "banana album" as it features a Warhol print of a  on the cover. Early copies of the album invited the owner to "Peel slowly and see"; peeling back the banana skin revealed a flesh-colored banana underneath. A special machine was needed to manufacture these covers (one of the causes of the album's delayed release), but  paid for costs figuring that any ties to Warhol would boost sales of the album.

On the 1996  reissue, the banana image is on the front cover while the image of the peeled banana is on the inside of the , beneath the CD itself.

When the album was first issued, the main back cover photo (taken at an  performance) featured an image of actor  projected upside-down on the wall behind the band. Emerson threatened to sue over this unauthorized use of his image, unless he was paid. Rather than complying, MGM recalled copies of the album and halted its distribution until Emerson's image could be airbrushed from the photo on subsequent pressings. Copies that had already been printed were sold with a large black sticker covering the actor's image. The image was restored in the 1996 CD reissue.

All songs written by  unless otherwise noted.

There is some confusion as to who actually produced The Velvet Underground & Nico. Although Andy Warhol was the only formally credited producer, he had very little direct influence or authority over the album beyond paying for the recording sessions. In fact, several other individuals who worked on the album are often mentioned as the album's technical producer.

Norman Dolph and John Licata are sometimes attributed to producing the Scepter Studios sessions, considering they were responsible for recording and engineering them (despite the fact that neither of the two were ever mentioned in the original album's credits). Dolph himself, however, admits John Cale as the album's rightful creative producer, as he handled the majority of the album's musical arrangements. And yet, Cale later recalled that it was Tom Wilson who actually produced nearly all the tracks on The Velvet Underground & Nico. "The band never again had as good a producer as Tom Wilson," Cale told an interviewer. "Andy Warhol didn't do anything." Sterling Morrison described Warhol as the album's producer "in the sense of producing a film. We used some of his money and our money...Andy was the producer but we were the "executive producers" too. We made the record ourselves and then brought it around and MGM said they liked it."

—However, others cite Warhol's lack of manipulation on the album itself a legitimate means of production. Lou Reed discussed the matter in an interview:

The Velvet Underground & Nico was notable for its overt descriptions of topics such as , , , and . "" describes a man's efforts to obtain  while "" is a nearly literal interpretation of  (which itself prominently features accounts of ). "" also built around drug culture as its premise. One of the most well-known tracks on the album is "", a song that details an individual's use of the drug and the experience of feeling its effects.

, who wrote the majority of the album's lyrics, never intended to write about such topics for shock value. Reed, a fan of poets and authors such as , , , , and , saw no reason why the content in their works couldn't translate well to  music. An English major, having studied for a  at , Reed said in an interview that he thought joining the two (gritty subject matter and music) was "obvious". "That's the kind of stuff you might read. Why wouldn't you listen to it? You have the fun of reading that, and you get the fun of rock on top of it."

Though the album's dark subject matter is today considered revolutionary, several of the album's songs are concerned with other topics. Certain songs were written by Reed as observations of the members of 's " ". "" in particular was written about  at Warhol's request. "", inspired by , is a tender and affectionate song; stark in contrast to a song like "Heroin". A common mis-perception is that "" was written by Reed at Warhol's request (as stated in  and 's Velvet Underground biography Up-Tight: The Velvet Underground Story). While the song does seem to be another observation of Factory denizens, Reed had written the song (and even recorded a demo version in 1965) before meeting Warhol.

Much of the album's sound was conceived by , who stressed the experimental qualities of the band. Cale, who was influenced greatly by his work with ,  and the early  movement, encouraged the use of alternative ways of producing sound in music. Cale thought his sensibilities meshed well with Lou Reed's, who was already experimenting with alternative tunings. For instance, Reed had "invented" the  tuning for a song he wrote called "The Ostrich" for the short-lived band The Primitives. Ostrich guitar tuning consists of all strings being tuned to the same note. The method was utilized on songs "" and "". Often, the guitars were also tuned down a whole step, which produced a lower, fuller sound that Cale called "sexy".

Cale's viola was used on several of the album's songs, notably "Venus in Furs" and "Heroin". The viola used guitar and mandolin strings, and when played loudly, Cale would often liken its sound to that of an airplane engine. Cale's Viola technique usually involved , or single notes sustained over long periods of time. He would, however, vary his attack, speed, or even add other notes on top to make the note have a different tone while maintaining the same pitch.

Upon its original release, The Velvet Underground & Nico was largely unsuccessful by popular music standards and was a financial failure. The controversial content of the album would lead to its almost instantaneous ban from various record stores. Many radio stations would refuse to play the album and magazines would refuse to carry advertisements for it.Its lack of success can also be attributed to , who failed to promote or distribute the album with anything but modest attention.

The album first entered the Billboard album charts on May 13, 1967 at #199 and left the charts on June 10, 1967 at #195. It then re-entered the charts on November 18, 1967 at #182, peaked at #171 on December 16, 1967 and finally left the charts on January 6, 1968 at #193. When Verve recalled the album in June due to Eric Emerson's lawsuit, it disappeared from the charts for only five months.

The critical world also took little notice of the album. One of the few print reviews of the album in 1967 was a mostly positive review in the second issue of Vibrations, a small rock music magazine. The review described the music as "a full-fledged attack on the ears and on the brain" and took note of the dark subject matter to be found in the majority of the song's lyrics.

It wasn't until decades later that the album received almost unanimous praise by numerous rock critics, many of whom made particular note of its influence in modern rock music. In April 2003,  put the album at the number one spot of their "Top Fifteen Most Influential Albums of All Time" list (though the list excluded albums by , , and ).  placed it at number 13 on their list of "" in November 2003.

In 1997, Velvet Underground & Nico was named the 22nd greatest album of all time in a   conducted in the  by , , and . In his 1995 book, "",  placed the album in the #1 spot on the list of '10 Classic Alternative Albums'. In 2006, readers voted it into 42nd place in the "2006 Q Magazine Readers' 100 Greatest Albums Ever" poll, while  placed it at number 1 in a list of "50 Albums That Changed Music" in the July of that year. Also in 2006, the album was chosen by  magazine as one of the 100 best albums of all time. It currently ranks at number 4 on's top albums of all time and number 1 for the year of 1967.

Frustrated by the album's year-long delay and unsuccessful release, 's relationship with  grew tense until Reed finally fired Warhol as manager in favor of .  was also forced out of the group, though she would start a moderately successful career as a solo artist, releasing her debut ,  in October 1967.Chelsea Girl would feature five songs written by members of The Velvet Underground, including "Wrap Your Troubles in Dreams", a song Reed wrote and recorded earlier with the aid of John Cale and Sterling Morrison in 1965.

 remained working with the group through 1967, producing their 1968 album  and Nico's Chelsea Girl