We investigated the gay dance party phenomenon in Sydney in terms of its social and historical context by carrying out 16 qualitative interviews with patrons and organizers of these events. Sydney with a population of 3.5 million is both the capital of New South Wales and the Gay capital of Australia. The gay dance party appears to be a response to a number of conditions which co-existed in the mid 1980s, as previously suggested by Wotherspoon (1991). These included the decriminalization of homosexuality and enactment of the anti-discrimination legislation which set the scene for greater expression of a gay lifestyle, the tradition of inner-city gay bars and private parties as meeting places, and the development of an inner-city gay enclave centered around the Kings Cross, Surry Hills, and Darlinghurst areas. In addition, the development of so-called “party drugs” such as Ecstasy which acted as mood-modulators, the availability of appropriately sited venues, with the development of laser-lighting and other computer-generated light shows, and the new threat of HIV infection acted to provide the context for a more ritualized set of social interactions which fulfilled social and psychological needs for many of the gay party patrons.