The original members of the Dwarves began making music together in the mid-1980s as teenagers in the Chicago garage rock outfit, Suburban Nightmare, which was compared to The Sonics, and which has been described as part of the Paisley Underground scene.
The band became notorious for self-mutilation, on-stage sex, and taking hard drugs, and their live shows would often only last around fifteen minutes, occasionally cut short due to injury caused by spectators. The band's sound began to evolve beyond its early garage roots with their second (nine minute long) LP, Toolin' For A Warm Teabag, which saw the band drifting towards a more truculent punk rock sound, influenced by GG Allin. The band released Blood Guts & Pussy on Sub Pop in 1989. By this time the Dwarves had dropped their early psychedelic sensibilities and morphed into a proper hardcore punk band. The Blood Guts & Pussy LP was followed up by EP Lucifer's Crank released by No.6 Records, as well as another Sub Pop LP, the metal-punk Thank Heaven For Little Girls, both in 1991.
In 1993 the band issued a press release stating their guitarist HeWhoCannotBeNamed had been stabbed to death in Philadelphia. Though this later turned out to be a hoax, the band even went as far as to attach a tribute to the "late" guitarist on their 1993 Sub Pop-released album Sugarfix. Sub Pop did not respond well to the hoax and summarily dropped the band from its label. The Dwarves reformed in 1997, releasing The Dwarves Are Young and Good Looking (described by Adam Bregman of Allmusic as "the beginning of a new Dwarves...one that plays real songs, had a set list, and left the club unbloodied"), and its 2000 followup The Dwarves Come Clean. In the film Me, Myself & Irene, Jim Carrey is seen singing along to Dwarves "Motherfucker", which Dahlia later said he got "tens of thousands of dollars" for. In 2000, the band offered the track "River City Rapist" to George W. Bush as his presidential campaign song.
In 2004 the band released The Dwarves Must Die, its first LP for the indie label Sympathy for the Record Industry, which featured guest appearances from Dexter Holland (The Offspring), Nick Oliveri (Queens of the Stone Age), Nash Kato (Urge Overkill), and voice actor Gary Owens. Dahlia was assaulted by Josh Homme of QOTSA before a Dwarves show in Los Angeles in 2004, which saw Homme placed on summary probation for thirty-six months.
In 2009, Blag and HeWhoCannotBeNamed were immortalised as Bobbleheads by Aggronautix.
Singer Blag Dahlia (aka Julius Seizure, born Paul Cafaro), and guitarist HeWhoCannotBeNamed (aka Pete Vietnamcheque) have always been the two core members of the group. The lineup has shifted around them, and currently consists of members "Fresh Prince of Darkness" (aka Marc Diamond from the band Motochrist) on guitar and returning drummer Gregory Pecker (aka Gnarlie Watts). "Rex Everything" and KMFDM drummer Andy Selway (under the alias Dutch Ovens) are on again/off again members. Former members include "Wholley Smokes", "Dutch Ovens", "Clint Torres", "Tazzie Bushweed", "Thrusty Otis", "Crash Landon", "Chip Fracture" "Wreck Tom ", and "Vadge Moore", among others.