The band set up the label after encountering problems over the release of their first 12" EP, The Feeding Of The 5000on the Small Wonder label in 1978. Workers at the pressing plant contracted to manufacture the disc refused to handle it due to the allegedly blasphemous content of one song, "Reality Asylum". The record was eventually released with this track removed and replaced by two minutes of silence, wryly retitled "The Sound Of Free Speech". However, using money from a small inheritance that had been left to one of the band, "Reality Asylum" was shortly afterwards re-recorded and released as a 7" single (NB. A later repress of The Feeding Of The 5000 on Crass records restored the missing track).
As well as releasing their own material, Crass were able to use Crass Records to make available recordings by other performers, the first of which was the 1980 single "You Can Be You" by Honey Bane, a teenage girl who at the time was staying at Dial House whilst on the run from a children's home. Others who recorded for the label included Zounds, Flux Of Pink Indians, Conflict, Icelandic band KUKL (who included singer Bjork), classical singer Jane Gregory, and the Poison Girls, a like-minded band who worked closely with Crass for several years. They also put out three editions of Bullshit Detector, compilations of demos and rough recordings that had been sent to the band which they felt represented the DIY punk ethic. The catalogue numbers of Crass Records releases were intended to represent a countdown to the year 1984 (eg, 521984 meaning "five years until 1984"), both the year that Crass stated that they would split up, and a date charged with significance in the anti-authoritarian calendar due to George Orwell's novel of the same name (see 1984 (novel)).