Nick Oliveri (under the moniker Rex Everything) formed Mondo Generator in 1997 and with friends Josh Homme, Brant Bjork, Rob Oswald,Karl Doyle and others, recorded the debut album, Cocaine Rodeo. The album wouldn't be released until 3 years later due to Oliveri and Homme being full-time members of Queens of the Stone Age. The album was released by cult-favorite Southern Lord Records in 2000. There was little support of the album by the way of live shows, and the band gained cult status among the most devoted Queens of the Stone Age fans.
In 2003, the band again emerged with a new album, A Drug Problem That Never Existed. This time, Oliveri hired on more friends for recording duties including Dave Catching, Troy Van Leeuwen, Mark Lanegan, Josh Homme, Brant Bjork, Molly McGuire, and Dwarves frontman Blag Dahlia for co-producing duties. It was released jointly by Mike Patton's label, Ipecac Recordings, and Homme's Rekords Rekords. The live band, which included Oliveri, Catching, Bjork, and McGuire, went on a three month tour of North America and Europe to support the disc. That summer, the band also played on the second stage of the Lollapalooza festival. Oliveri would do an afternoon set with Mondo Generator, then at night he would play with Queens of the Stone Age, who were appearing on the main stage.