The Ruts were formed on 18 August 1977. The band consisted of singer Malcolm Owen, guitarist Paul Fox, bass player John "Segs" Jennings and drummer Dave Ruffy and were active in anti-racist causes as part of the Misty in Roots People Unite collective based in Southall, West London and playing several benefits for Rock Against Racism.

     Schoolboy friends Fox and Owen shared a mutual interest in music. In the early 1970s they lived together in a commune on the Isle of Anglesey off the coast of North Wales, where they performed their own musical compositions with Paul Mattocks, who played flute, guitar and keyboards and later became The Ruts' first drummer.

     Post Office telephone engineer Jennings met record shop manager Ruffy in 1976 and became interested in punk after discussing the latter's Ramones' T-shirt. Meanwhile, Owen's interest in punk was piqued when he saw the Sex Pistols playing live. At the time, Fox was playing with Ruffy in a funk band, Hit and Run, which included J.D. Nicholas who went on to join The Commodores in the U.S and sixteen-year-old saxophone player Gary Barnacle, who later played on several Ruts songs. Hit and Run were a covers band who released one single, a version of Sam the Sham and the Pharoahs' 1965 hit "Wooly Bully". The Ruts' initial history is described in an audio interview with Jennings, conducted by Alan Parker, which appears on the album Bustin' Out.

   On 16 September 1977, The Ruts made their live debut, playing three songs during a break in a set by Mr. Softy (another Fox band) at The Target in Northolt, Middlesex.