Schrader engaged Bowie for a theme song in 1981, with Moroder having already recorded most of the music. Bowie was to put lyrics to the main theme. The words only had a basic relation to the film. The B-side is a Moroder-only instrumental which featured no input from Bowie.
The song itself, in keeping with the dark tone of the film, has some slight goth rock influences, with Bowie singing in a deep croon while being backed up by a female chorus, a combination that The Sisters of Mercy would commonly employ years later.
Due to Moroder's contract, the single was issued by MCA. The full-length version would appear on the soundtrack album, and the 12" single, while a 4:08 edited version was made for the 7" release. The single would reach #26 in the UK, and #67 in the US - Bowie's biggest hit there since "Golden Years". It peaked at #1 in New Zealand, remaining there for three weeks. It was also #1 in Norway for seven consecutive weeks, and then returned to the top for a further week.
The single was released three separate times by MCA. First with "Cat People" as the A-side, then again two months later with "Paul's Theme" as the A-side, and finally in November 1982 with "Cat People" back on the A-side. Notable contribution as orchestrator was made by Hungarian-born composer, Sylvester Levay.
In 1983, Bowie would re-record the song for his Let's Dance album. This version would also be released as the B-side to the title track's single release, and be performed on Bowie's Serious Moonlight Tour.