Shortly thereafter Keith and Marek were living in Queens in New York, and Marek discovered an old bass guitar in the basement. Keith soon dropped his former passion for the drums and took up guitar, and Peter dropped by one day with a handful of harmonicas. Inevitably, the trio decided to form their own band and The Fleshtones were born.

For three years the band struggled their way through a spate of drummers and ancillary musicians, although Brian and Gordon, playing tenor and alto saxes respectively, floated in and out of gigs with more freedom than any of the other one-time members. In 1978 Suicide's Alan Vega brought The Fleshtones to Marty Thau's attention and Thau signed the band to his adventurous but ill-fated Red Star Records. Red Star released The Fleshtones' first and only record of the '70s in mid 1979 - the single "American Beat". The record captured the fuzzy reverb, tambourine and oohing backups that epiomise The Fleshtones' rootsy pop sensibilities.

The band continued to pack houses in New York and build their repertoire, and in March 1979 they won the first New York Battle of the Bands. In September 1980 the Fleshtones performed "Shadow Line" for the movie cameras in New York as one of the new music bands featured in the film, "Urgh! A Music War", and that song appeared on the accompanying soundtrack album. They also played "Shadow Line" and "F-F-Fascination" for Thau's and Jimmy Destri's "2X5" album/concert, released in 1980.

Shortly after the "Urgh!" filming, The Fleshtones signed with IRS and rushed out to the West Coast for a whirlwind series of appearances, after having settled in with drummer Bill Milhizer in January 1980. In November 1980 IRS released a five-song 12 inch EP entitled "Up Front", from which two cuts, "The Girl From Baltimore/Feel the Heat", were released as a single early the following year in the UK.