Madchester was a musical and cultural scene that emerged in the English city of Manchester during the late 1980s, closely associated with the indie dance movement. Indie dance (also referred to as indie rave) blended indie rock with elements of acid house, psychedelia, and 1960s pop.

The term Madchester was coined by Factory Records' Tony Wilson, and was popularised by the British music press in the early 1990s. However, the origin of the term can be traced to a script meeting between Factory Records video directors Philip Shotton and Keith Jobling, known as "the Bailey Brothers." They coined Madchester while developing a script and later suggested it to Tony Wilson. Subsequently, Wilson instructed the band Happy Mondays to rename their EP from "Rave On" to "Madchester Rave On." The Happy Mondays' lead vocalist, Shaun Ryder, recalled: "It was our video directors, the Bailey Brothers, who came up with the term 'Madchester,' but we said, 'Great, yeah, go with it,' because Manchester was mad at the time."

The scene's most famous groups include the Stone Roses, Happy Mondays, Inspiral Carpets, the Charlatans, James, and 808 State. The movement was heavily influenced by the widespread use of drugs, particularly MDMA.

A major catalyst for the distinctive musical ethos in the city was the Haçienda nightclub, co-owned by members of New Order, which played a pivotal role in the movement known as the Second Summer of Love.

The music scene in Manchester immediately before the Madchester era was dominated by the Smiths, New Order, and the Fall, who became significant influences on the Madchester movement. The opening of The Haçienda nightclub in May 1982, an initiative by Factory Records, was also instrumental in shaping Manchester's popular culture. During its early years, the club primarily featured club-oriented pop music and hosted gigs by artists such as New Order, Cabaret Voltaire, Culture Club, Thompson Twins, and the Smiths. DJs like Hewan Clarke and Greg Wilson contributed to the club's prominence. By 1986, The Haçienda shifted its focus from being a live venue to a dance club.

The Festival of the Tenth Summer in July 1986, organised by Factory Records, reinforced Manchester's reputation as a hub for alternative pop culture. The festival featured film screenings, a music seminar, art exhibitions, and performances by the city's leading bands, including an all-day concert at Manchester G-Mex with A Certain Ratio, the Smiths, New Order, and the Fall. According to Dave Haslam, the festival showcased how "the city had become synonymous with larger-than-life characters playing cutting-edge music. [...] Individuals were inspired and the city was energised; of its own accord, uncontrolled."

In addition to these venues and events, the warehouse parties organised by Steve Adge were crucial in the development of the scene. The Stone Roses' warehouse parties, first held in 1985, were significant, with DJ Dave Booth supporting the Stone Roses' live performances. These parties, including the notable "Warehouse 1, The Flower Show" event on 20 July 1985, played a vital role in establishing the band's following and the burgeoning music scene in Manchester. Booth was an influential DJ in Manchester's music landscape. He co-created the Playpen nights and the Blood Club and was a resident DJ at several key venues in Manchester's alternative club network. He began his career at the Roxy Room in Pips and performed at other clubs like Devilles, Berlin, Cloud 9, and Legends, helping to create a network of venues that fostered the growth of Manchester's alternative music scene. The city's emerging bands, including the Stone Roses, frequented these clubs and drew inspiration from the diverse music played by DJs.

In 1987, the Haçienda began playing house music, with DJs Mike Pickering, Graeme Park, and "Little" Martin Prendergast hosting "Nude Night" on Fridays. The Haçienda transitioned from making a consistent loss to selling out by early 1987. During that year, it hosted performances by American house artists such as Frankie Knuckles and Adonis.