At the time of the recording of Never Say Die! the members of Black Sabbath were all heavily involved in drug and alcohol abuse. Prior to recording, vocalist Osbourne briefly quit the band and was temporarily replaced by former Savoy Brown and Fleetwood Mac vocalist Dave Walker. In 1992, guitarist Tony Iommi explained to Guitar World, "We never wanted him to leave, and I think he wanted to come back – but no one would tell the other how they felt. So we had to bring in another singer and write all new material." The band wrote a handful of songs with Walker, with that short-lived line-up even performing an early version of what would later become "Junior's Eyes" on the BBC programme Look Hear. Osbourne eventually rejoined the band, refusing to sing any of the songs written with Walker. Iommi elaborated in the 1992 Guitar World piece,
... Bill Ward had to sing on one track ("Swinging The Chain") because Ozzy refused to sing it. We ended up having to write in the day so we could record in the evening, and we never had time to review the tracks and make changes. As a result, the album sounds very confused.
The songs with Walker were redone, including "Junior's Eyes", which was rewritten to be about the then-recent death of Osbourne's father. "We had a few internal problems", Osbourne admitted to Sounds magazine at the time. "My father was dying, so that put us out for over three months with the funeral and everything. I left the band for three months before we got back together to record it." However, the writing was on the wall, with Osbourne stating in his memoir I Am Ozzy, "No one really talked about what had happened. I just turned up in the studio one day – I think Bill had been trying to act as peacemaker on the phone – and that was the end of it. But it was obvious things had changed, especially between me and Tony. I don't think anyone's heart was in it anymore."
The album was recorded at Sounds Interchange Studios in Toronto. "We went to Toronto to record it, and that's when the problems started", Iommi recalled. "Why Toronto? Because of the tax, really. The studio was booked through brochures because people thought it might be a good one. We got there and it had a dead sound – totally wrong. We couldn't get a real live sound. So what we had to do was rip the carpet up and try to make it as live as we could. They were okay about it, but it took time to get it exactly right. There were no other studios available." In 2001 Iommi elaborated to Dan Epstein of Guitar World, "I booked a studio in Toronto, and we had to find some place to rehearse. So we had this cinema that we'd go into at 10 o'clock in the morning, and it was freezing cold; it was in the heart of winter there, really awful. We'd be there, trying to write songs during the day and go and record them at night." In the same article bassist Geezer Butler added, "Never Say Die was a patch-up kind of an album ... People didn't realize that it was sort of tongue-in-cheek, the Never Say Die! thing. Because we knew that was it; we just knew it was never going to happen again. We did this 10th anniversary tour with Van Halen in 1978, and everybody's going 'Here's to another 10 years!' And I'm going, (rolls eyes) 'Yeah, sure!'" Butler was also growing impatient with Osbourne's criticism of his lyrics, telling Guitar World in 1994, "I used to hate doing it towards the end of the Ozzy era. He'd say, 'I'm not singing that.' So you'd have to rethink the whole thing." In the 2004 book How Black Was Our Sabbath, Iommi is quoted as saying, "We were all into silly games ... and we were getting really drugged out ... We'd go down to the sessions and have to pack up because we were too stoned. Nobody could get anything right. We were all over the place. Everybody was playing a different thing." "With Never Say Die!, we were down on our luck", Osbourne reflected to Spin magazine's Kory Grow. "We were just a fucking bunch of guys drowning in the fucking ocean. We weren't getting along with each other and we were all fucked-up with drugs and alcohol. And I got fired. It was just a bad thing. You try to lift your head up above water, but eventually the tide sucks you under."
In the liner notes to the 1998 live album Reunion, Ward defended the album: "In the circumstances, I thought we did the best we could. We were taking care of business ourselves, we didn't have millions from the record company and, despite the booze and Ozzy's departure, we tried to experiment with jazz and stuff the way we had in the early days. Songs like 'Johnny Blade' and 'Air Dance' I still like." Osbourne vehemently disagrees in his autobiography, at least as far as the jazz experiments went, calling the instrumental "Breakout" "a jazz band going da-dah-da-dah, DAH, and I just went, Fuck this, I'm off ... The bottom line was that 'Breakout' was stretching it too far for me. With tracks like that on the album, we might as well have been called Slack Haddock, not Black Sabbath. The only impressive thing about a jazz band as far as I was concerned was how much they could drink."
While Butler received credit for "Swinging the Chain"'s lyrics, they were actually composed by Ward.
The sleeve for the album was the second (following Technical Ecstasy) by Hipgnosis and the US and UK releases differed slightly in the faint images of British military pilots seen in the sky. The inner-bag featured graphics in keeping with the sleeve and credits, but no lyrics. The aeroplane on the cover appears to be a North American T-6 Texan.