While hard rock influences were still present, such as on "Immigrant Song", acoustic-based songs such as "Gallows Pole" and "That's the Way" showed Led Zeppelin were capable of playing different styles successfully. The band wrote most of the material themselves, but as with prior records, included two songs that were re-interpretations of earlier works, "Gallows Pole" based on a traditional English folk song, by way of American singer Fred Gerlach, and "Hat's Off to (Roy) Harper", a reworking of a blues song by Bukka White.
The acoustic material developed from a songwriting session between band members Jimmy Page and Robert Plant at Bron-Yr-Aur cottage in Wales, which influenced the musical direction. The songs were recorded in three locations. Much of the work was done at Headley Grange, a country cottage, using the Rolling Stones Mobile Studio. Additional sessions were held in more traditional recording studios such as Island Studios, and Olympic Studios in London. As with the prior album, the band eschewed the use of guest musicians, with all music played by band members Page (guitars), Plant (vocals), John Paul Jones (bass, keyboards), and John Bonham (drums). The range of instruments played by the band was greatly enhanced in this album, with Jones especially emerging as a talented multi-instrumentalist, playing a wide range of keyboard and stringed instruments including various synthesizers, mandolin and double bass in addition to his usual bass guitar. As with prior albums, Page served as producer on the album, with mixing done by Andy Johns and Terry Manning.
The album was one of the most anticipated of 1970, and its shipping date was held up by the intricate inner sleeve design based around a volvelle, with numerous images visible through holes in the outer cover. It was an immediate commercial success upon release and topped the UK and US charts. Although critics were typically confused over the change in musical style and gave the album a mixed response, Led Zeppelin III has since been acknowledged as representing an important milestone in the band's history, and a turning point in their music.
By 1970, Led Zeppelin had achieved commercial success in both the UK and the US with their first two albums. They were determined to have a proper break, having recorded most of Led Zeppelin II in various locations while on tour, financing the sessions with the album sales and tour receipts. Following an exhausting concert tour of North America that spring, lead singer Robert Plant recommended to guitarist and producer Jimmy Page that they should retreat to Bron-Yr-Aur, an 18th-century cottage in Snowdonia, Wales, on a hilltop overlooking the Dyfi Valley, three miles (4.8 km) north of the market town Machynlleth. Plant had spent holidays there with his family.
This remote setting had no running water or electric power, which encouraged a slight change of musical direction for the band towards an emphasis on acoustic arrangements. Page later explained the tranquillity of Bron-Yr-Aur stood in sharp contrast to the continual touring of 1969, and affected the overall tone of the songwriting, and the dominance of acoustic guitars. His playing was influenced by folk guitarists Davey Graham and Bert Jansch, who regularly used alternative guitar tunings. Plant also recalled the band were "obsessed with change" and enjoyed listening to John Fahey. The band specifically wanted a change in direction, to show they could play any style of music they wanted.