With Metallica scheduled to play the 1987 Monsters of Rock festival at Castle Donington, the band's UK label Vertigo Records suggested them to release an extended play album for the situation. Songwriting attempts with new bassist Jason Newsted only resulted in a demo for "Blackened", and frontman James Hetfield broke his arm skateboarding, so the band resorted to recording covers. This is reminiscent to how the European "Creeping Death" single had led to two B-sides based on cover songs, labeled "Garage Days Revisited". Newsted used his construction experience to install soundproofing on Lars Ulrich's garage in El Cerrito, California, where the band would rehearse.
While rehearsing "White Lightning" by New wave of British heavy metal band Paralex, Kirk Hammett instead started playing "The Wait" by post-punk group Killing Joke, making the band choose that song. Other tracks considered but dropped include "Signal Fire" by Japanese band Bow Wow, and another NWOBHM song, Gaskin's "I'm No Fool". The band included "The $5.98 E.P." in the title in an effort to ensure that fans were not overcharged for it. The original cassette release includes a sticker which reads "If they try to charge more, STEAL IT!" The official United States CD release of the EP has an amended title with "The $9.98 CD" because the retail price of CDs was much higher than cassettes; other countries (such as Australia) still displayed "The $5.98 E.P." with a sticker stating that this is the "title" and not the price. "The Wait" was omitted from the UK pressings in order to conform to local music-industry rules regarding the length of EPs.
Though The $5.98 E.P.: Garage Days Re-Revisited has been out of print since 1989 and is considered a collector's item, all five tracks were later included on the 1998 double-album Garage Inc., along with a number of other covers Metallica had recorded throughout its career as well as a collection of entirely new recordings. The cover of the CD also was used as a basis for the Garage Inc. back cover, which shows the original Garage Days cover with pictures of the member's faces, circa 1998, taped over the original faces, along with "Garage Inc." covering the original album name.