Belle & Sebastian were formed in Glasgow in 1996 by Stuart Murdoch and Stuart David. Together they recorded some demos with Stow College music professor Pilar Duplack, which were picked up by the college's Music Business course that produces and releases one single each year on the college's label, Electric Honey.

As the band had a number of songs already and the label were extremely impressed with the demos, Belle & Sebastian were allowed to record a full-length album, which was named Tigermilk. Murdoch once described the band as a "product of botched capitalism".

Tigermilk was recorded in three days and originally only one thousand copies were pressed on vinyl. These original copies now sell for up to £400. The warm reception the album received inspired Murdoch and David to turn the band into a full-time project, recruiting Stevie Jackson (guitar and vocals), Isobel Campbell (cello/vocals), Chris Geddes (keys) and Richard Colburn (drums) to fill out the group.

After the success of the debut album, Belle & Sebastian were signed to Jeepster Records in August 1996 and If You're Feeling Sinister, their second album, was released on 18 November. The album was named by Spin as one of the 100 greatest albums between 1985 and 2005, and is widely considered the band's masterpiece.

Just before the recording of Sinister, Sarah Martin (violin/vocals) joined the band. Following this a series of EPs were released in 1997. The first of these was Dog on Wheels, which contained four demo tracks recorded before the real formation of the band.

In fact, the only long-term band members to play on the songs were Murdoch, David, and Mick Cooke, who played trumpet on the EP but would not officially join the band until a few years later. It charted at #59 in the UK singles chart.

The Lazy Line Painter Jane EP followed in July. The track was recorded in the church where Murdoch lived and features vocals from Monica Queen. The EP narrowly missed out of the UK top 40, peaking at #41.

The last of the 1997 EPs was October's 3.. 6.. 9 Seconds of Light. The EP was made Single of the Week in both the NME and Melody Maker and reached #32 in the charts, thus becoming the band's first top 40 single.