"I'm on Fire" was recorded in February 1982 during the first wave of Born in the U.S.A. sessions. This took place in impromptu fashion when Springsteen started making up a slow tune on guitar for some lyrics he had, and drummer Max Weinberg and keyboardist Roy Bittan, hearing it for the first time, created an accompaniment on the spot. The result was a moody number that merges a soft rockabilly beat, lyrics built around sexual tension, and synthesizers into an effective whole; it was one of the first uses of that instrument in Springsteen's music.
The song peaked at #6 on the Billboard Hot 100 pop singles charts in early 1985. It was the fourth of a record-tying seven Top 10 hit singles to be released from Born in the U.S.A. It is also remarkable that the single reached #1 in the Netherlands for 3 weeks in August 1985, at the same time as 2 other Springsteen singles ("Dancing in the Dark" and "Born in the U.S.A.") were occupying the Top 12.
Unlike the first three singles from the album, no remixes were made for "I'm on Fire" (nor were any made for any of the subsequent singles released).