After some uncertainty from Canty about what he wanted to do with his future, the trio regrouped and booked their first show at the Wilson Center in early September 1987. The group still needed a name, so MacKaye chose the word "fugazi" from Mark Baker's Nam, a compilation of stories from Vietnam War veterans, it originally being an acronym for 'Fucked Up, Got Ambushed, Zipped In'. The band began inviting Picciotto to practices. Inspired by use of a foil in hip hop, Picciotto sang backup vocals. After his band Happy Go Licky broke up, he became more involved with Fugazi. MacKaye eventually asked Picciotto to become a full member, which he accepted.
Fugazi embarked on its first tour in January 1988. In June 1988 the band recorded its debut EP Fugazi with producer Ted Nicely, and shortly afterwards embarked on an arduous tour of Europe. At the tour's conclusion in December, the band recorded songs for its intended debut album. However, the band was spent from touring and decided that the resulting sessions were unsatisfactory. The tracklist was cut down to an EP and released as Margin Walker the following year. Upon the band's return from Europe, Picciotto, unsatisfied with merely singing, began playing guitar.
The band's first album, Repeater, was released in January 1990. The band spent most of the year touring behind Repeater and routinely sold out 1,000-capacity shows. By summer 1991 the album had sold more than 100,000 copies, a large number for a label that relied on word-of-mouth promotion. While major labels began to court Fugazi, the band decided that Dischord was distributing their records well enough and refused the offers.
For the band's second album Steady Diet of Nothing (1991), the band once again asked Ted Nicely to produce. Nicely had become a chef and had to reluctantly turn down the job, so the bandmembers decided to produce the record themselves. Fugazi recorded its third album In on the Kill Taker (1993) with Steve Albini in Chicago; however, the results were deemed unsatisfactory and the band rerecorded the album with Ted Nicely. With the breakthrough of alternative rock in the early 1990s, In on the Kill Taker became the group's first record to enter the Billboard album charts.
By Red Medicine (1995), Fugazi were on the road less frequently, due in large part to other professional and personal commitments. Their music had evolved far from their hardcore roots, with strong art rock leanings. The Argument (2001), featured the first extensive contributions from outside musicians, most notably longtime roadie and sound engineer Jerry Busher, who added percussion or a second drum set to most of the album's songs.
In the meantime, the members are undertaking side projects, with MacKaye forming the duo The Evens with drummer and singer Amy Farina (formerly of the Warmers). In 2004, MacKaye produced the DC EP for Red Hot Chili Peppers guitarist John Frusciante, which also featured Jerry Busher.
Canty has been doing a variety of soundtrack scores and playing bass in the trio Garland Of Hours alongside frequent Fugazi guest contributors Jerry Busher and Amy Domingues. Canty also appears on Bob Mould's 2005 album Body of Song, and has played bass live with Mary Timony. He is currently working in the Burn to Shine DVD series which is being released by Trixie DVD.
Lally has appeared on fellow DC post-punkers Decahedron's debut album Disconnection_Imminent, as well as on a one shot project with John Frusciante of the Red Hot Chili Peppers and Josh Klinghoffer of The Bicycle Thief known as Ataxia. He also released his first solo album There to Here and is also performing shows under his name, solo and along with producer Don Zientara. His second solo album, Nothing Is Underrated, was released in November 2007.
Guy Picciotto currently works as a record producer most notably with Blonde Redhead and The Blood Brothers, and he has performed alongside members of The Ex at the Jazz festival in Wels, Austria. Picciotto also co-produced and contributed guitar on Vic Chestnut's most recent album, North Star Deserter, for Constellation Records.
While the band spend time on their individual projects, their music is still influencing a whole crowd of new artists such as the UK's Future Of The Left and The Tupolev Ghost.
Generally, MacKaye's lyrics and singing are more direct and anthemic (MacKaye admits that he loves audience sing-alongs and writes songs with shoutable slogans), while Picciotto usually favors a more abstract, oblique approach. Lally has contributed vocals to a few songs as well, in which he sings in a more relaxed, quiet style as opposed to MacKaye and Picciotto, whose lyrics and vocals often feature strong emotional intensity.
Later, Fugazi more fully integrated elements of punk rock, hardcore, soul and noise with an inventively syncopated rhythm section. Notable is MacKaye and Picciotto's inventive, interlocking guitar playing, which often defies the traditional notion of "lead" and "rhythm" guitars. They often feature unusual and dissonant chords and progressions filtered through a hardcore punk lens. Their guitar work has earned comparisons to New York art-punk icons Television and the early work of the UK's Gang of Four. Most of Fugazi albums have featured an instrumental song or two. Though clearly rooted in punk and hardcore, there is arguably much more than punk to be found in Fugazi's music; for example, a review of The Argument compared a few songs to Radiohead. With Red Medicine, critics Ian McCaleb and Ira Robbins declared that Fugazi combined an "unprecedented dynamic range ... and previously unimagined elements" such as "clattering musique concrète ... piano and sound effects ... murky dub and lancing sax" and "loose-limbed jammy funk ... into an ambitious, experimental format that raises more stylistic questions than it answers."
Fugazi's early tours earned them a strong word-of-mouth reputation, both for their powerful performances, and for their eagerness to play in unusual venues. They sought out alternatives to traditional rock clubs partly to relieve the boredom of touring, but also hoping to show fans that there are other options to traditional ways of doing things. As Picciotto said, "You find the Elks Lodge, you find the guy who's got a space in the back of his pizzeria, you find the guy who has a gallery. Kids will do that stuff because they want to make stuff happen.
The group (MacKaye in particular) also made a point of discouraging violent, unwanted slam dancing and fistfights, which they saw as relics of the late 1970s/early 1980s hardcore punk era. Azerrad quotes Mackaye, "See, [slam dancers] have one form of communication: violence ... So to disorient them, you don't give them violence. I'd say, 'Excuse me, sir...'- I mean, it freaks them out -'Excuse me, sir, would you please cut that crap out?' (emphasis in original) Azerrad writes, "[Mackaye's] admonitions seemed preachy to some, but most were deeply grateful. And by and large, people would obey - it wasn't cool to disrespect Ian MacKaye. Occasionally, Fugazi would escort an unrepentant slam-dancer from the concert, and give them an envelope containing a $5 refund (they kept a stock of such envelopes in their tour van for these occasions).