The dreamy and gently psychedelic indie folk duo Damon Naomi was formed by drummer Damon Krukowski and bassist/vocalist Naomi Yang shortly after the breakup of their former group, Galaxie 500. The project's sound developed from a hushed and reverb-heavy take on indie rock into an almost ambient take on folk, growing softer by the time of 1998 album Playback Singers. Damon Naomi would collaborate frequently, whether that meant splitting time between their self-titled project and roles in psych rock band the Magic Hour, performing with Pearls Before Swine's Tom Rapp, or an ongoing relationship with Japanese band Ghost that included touring and collaborative recordings. That relationship continued long into the band's career, carrying over from 2000's collaborative studio album Damon Naomi with Ghost to 2021's A Sky Record, made with Ghost guitarist and unofficial third member Michio Kurihara.

Following Galaxie 500's breakup in 1991, Krukowski and Yang planned to retire from music; stung by the group's bitter disintegration and left without a label due to the bankruptcy of Rough Trade, after issuing a lone 1991 EP under the name Pierre Etoile, the couple opted to concentrate on running Exact Change, the small surrealist publishing house they founded the year prior. They still occasionally worked on writing new material, and soon producer Kramer, who earlier helmed all three of the Galaxie 500 records, contacted the duo about cutting new material for his label, Shimmy Disc. After repeatedly turning down the offer, Krukowski and Yang finally agreed, and traveled to Kramer's Noise New Jersey studios to begin recording.

Dropping the Pierre Etoile name to work as Damon Naomi, they issued the LP More Sad Hits in 1991; featuring Krukowski on vocals, guitar, and percussion and Yang on vocals and bass, the record continued the ghostly ambience that defined the best work of their previous band while creating a more emotionally expansive backdrop. Following its release the couple again retired, but later turned up as the rhythm section of the Magic Hour, touring and recording three well-received albums in the mid-'90s. Krukowski and Yang resurfaced as a duo in 1995 with The Wondrous World of Damon Naomi on Sub Pop; following the breakup of the Magic Hour, they returned in 1997 with the single "The Navigator” and a 1998 album, Playback Singers (also on Sub Pop).

The duo collaborated with the Japanese psych folk band Ghost for their 2000 album, appropriately dubbed Damon Naomi with Ghost. Two years later, the CD/DVD Song to the Siren: Live in San Sebastian was released. Ghost guitarist Michio Kurihara featured on the album and remained a vital part of the duo’s live shows and recordings. After leaving Sub Pop and forming their own label, 20/20/20, they issued The Earth Is Blue in 2005 and Within These Walls in 2007. After a long break, which saw the release of a compilation of tracks culled from their Sub Pop recordings (The Sub Pop Years), the duo released its seventh studio album, False Beats and True Hearts, in early summer of 2011. Working at their usual deliberate pace, their next album, Fortune, was released in early 2015. The soundtrack to a silent film of the same name made by Yang, it was the duo's most intimate work to date. In 2019, compilation In the 21st Century was released, gathering highlights from the albums released on the 20/20/20 label. In 2021, A Sky Record arrived, the band's first new material since Fortune, tracked in part in Tokyo with Kurihara on guitar. ~ Jason Ankeny, Rovi