"This record began as an experiment with noise on a laptop in a bus on tour somewhere. That sound led to a daydream about the end of the world. That daydream stuck with me and over time revealed itself to be much more...it takes place about fifteen years in the future. Things are not good. If you imagine a world where greed and power continue to run their likely course, you'll have an idea of the backdrop. The world has reached the breaking point – politically, spiritually and ecologically. Written from various perspectives of people in this world, Year Zero
examines various viewpoints set against an impending moment of truth."
—Trent Reznor on Year Zero, 2007
In a 2005 interview with Kerrang!, Trent Reznor expressed his intentions to write material for a new release while on tour promoting With Teeth. He reportedly began work on the new album by September 2006. Reznor devised much of the album's musical direction on his laptop. Reznor told Kerrang! in a later interview, "When I was on the Live: With Teeth tour, to keep myself busy I just really hunkered down and was working on music the whole time, so this kept me in a creative mode and when I finished the tour I felt like I wasn't tired and wanted to keep at it."
The limitations of devising the album's musical direction on a tour bus forced Reznor to work differently from usual. Reznor said, "I didn't have guitars around because it was too much hassle ... It was another creative limitation ... If I were in my studio, I would have done things the way I normally do them. But not having the ability to do that forced me into trying some things that were fun to do."
By the end of the tour, Reznor began work on the album's lyrical concepts, attempting to break away from his typically introspective approach. Reznor drew inspiration from his concern at the state of affairs in the United States and at what he envisioned as the country's political, spiritual, and social direction. Year Zero was mixed in January 2007, and Reznor stated on his blog that the album was finished as of February 5. The album's budget was a reported US$2 million, but since Reznor composed most of the album himself on his laptop and in his home-studio, much of the budget instead went toward the extensive accompanying promotional campaign.
A song cut from the album included vocal work by Queens of the Stone Age's Josh Homme. The same year, Reznor contributed vocals to their song "Era Vulgaris", which was also cut from the album of the same name.