Slayer was the opening act for Bitch at the Woodstock Club in Los Angeles, performing eight songs—six being covers. While performing an Iron Maiden cover, the band was spotted by Brian Slagel, a former music journalist who had recently founded Metal Blade Records. Slagel met with the band backstage and asked if they would like to be featured on the label's upcoming Metal Massacre III compilation; the band agreed. The band's appearance on the compilation created underground buzz, which led to Slagel signing the band with Metal Blade Records. Recorded in Los Angeles, California, Show No Mercy was financed by vocalist Tom Araya, who used his earnings as a respiratory therapist, and money borrowed from guitarist Kerry King's father. King says the album is "fuckin' Iron Maiden here and there". Vocalist Araya asserts Venom, Judas Priest, Iron Maiden, and Mercyful Fate were big influences on the record, as guitarist King was into the Satanic image.
Gene Hoglan, later known as the drummer for bands like Dark Angel and Death, provided backing vocals on the song "Evil Has No Boundaries". "Back at the time it was Jeff [Hanneman] and Kerry doing the 'Evil!' You know, it didn't sound too heavy and I mentioned to like Tom or Jeff or somebody like, 'You know you guys should consider...maybe consider doing like big gang vocals on that, make it sound evil like demons and stuff,' and they were like 'Good idea.' But how about now, we got about eight dudes sitting around in the studio, and now everybody jumped up and yelled 'EVIL!!!' So I was like 'Cool' because I'm like, 'I wanna sing on this record somehow, that's how I can do it,' totally unplanned you know?! Sure enough they were like, 'Fuck we have the time, let's do it.' So I was like 'Yeah, I got to sing on it!'" On recording the drums, Slagel wanted drummer Dave Lombardo to play without using cymbals due to the amount of noise they made, as he was unsure if he could siphon the noise out, which he eventually did.
The band used Satanic themes in both lyrics and live performances to gain notice among the metal community. The back cover featured 'side 666' and inverted crosses, with Hanneman playing his guitar. Due to the imagery and lyrical content, Slayer received mail from the Parents Music Resource Center telling the band to stop releasing records. Araya comments, "Back then you had that PMRC, who literally took everything to heart. When in actuality you're trying to create an image. You're trying to scare people on purpose." The album produced the songs "The Antichrist", "Die by the Sword", and "Black Magic", which are played at Slayer's live shows regularly.