Recorded over several months in 1985, Of Donkeys & Toads takes its title from the traditional nicknames of the Channel Islands — Guernsey islanders are les ânes (the donkeys), Jersey islanders are les crapauds (the toads). The album was split between a borrowed four-track at Le Château des Sarrasins and live sessions at The Deerhound, the band's regular Tuesday-night residency in St Peter Port. The live tracks preserve the room — pint glasses, crowd singalongs, and a floor that shakes when the chorus hits.

Sterling St. Clair produced remotely, receiving tapes by post and returning notes by telephone. He has described the experience as "the only album I've ever mixed without being in the same hemisphere as the drum kit."