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This was written by Dexys lead singer Kevin Rowland, trombone player Jim Paterson and guitarist Al Archer.

In an interview with Kevin Rowland, he explained how the song came together:

"We wanted a good rhythm and we found one. Lots of records we liked had that rhythm: 'Concrete and Clay,' 'It's Not Unusual' by Tom Jones. Lots of records we liked had that 'Bomp ba bomp, bomp ba bomp.' We felt it was a good rhythm. We came up with the chord sequence ourselves and just started singing melodies over it. I remember thinking, 'We're really onto something here. I came up with that, 'Too ra loo ra,' and I remember thinking, 'Wow, this is sounding really good.' You get a feeling when you're writing a song. Something happens. And in the end it kind of finished itself."

I guess he never heard "Too-Ra-Loo-Ra-Loo-Ral (That's An Irish Lullaby)", a big hit for Bing Crosby in 1944 which was from the 1913 play "Shameen Dhu" ("Black-Haired Jimmy" or "Dark Jimmy").

There are t least two conflicting folk legends about the inspiration for the song:

This song is based on a true story. Eileen was a girl that Kevin Rowland grew up with. Their relationship became romantic when the pair were 13, and according to Rowland, it turned sexual a year or two later. Rowland was raised Catholic and served as an altar boy in church. Sex was a taboo subject, and considered "dirty" - something that fascinated him. When he wrote this song, Rowland was expressing the feelings of that adolescent enjoying his first sexual relationship and dreaming of being free from the strictures of a buttoned-down society:

You in that dress
My thoughts I confess
Verge on dirty

The song describes the thin line between love and lust.

However in a newspaper interview Rowland said there was actually no real Eileen. "In fact she was composite, to make a point about Catholic repression."

The intro of the Celtic fiddle solo was based on Thomas Moore's Irish folk song "Believe Me, if All Those Endearing Young Charms".