Habibi was offered as an mp3 download as part of NPG Music Club Edition # 3 (along with The Work Part 1, Northside and The Daisy Chain (the latter two both by the New Power Generation) and NPG Ahdio Show #3). A few days after the initial release, a slightly edited version replaced the original on the download page, perhaps to remove some lyrics and elements from Jimi Hendrix's Machine Gun (from his 1970 live album Band Of Gypsys).
While specific recording dates are not known, basic tracking is believed to have taken place in 1998 at Paisley Park Studios in Chanhassen, Minnesota. The track is largely built around Jimi Hendrix's song Machine Gun. It is included here as a separate track, however, as Habibi includes several improvised elements, and was given a new name by Prince. On 14 November 1998, Love4OneAnother.com noted that Prince wanted to get in touch with the Hendrix family (who controls the estate) to donate a version of Machine Gun "free of charge, to use at their discretion", and Habibi is likely to be an edited version of that track. Although recorded during a time when Prince was using the name , the track was released using the name Prince, so it is listed as such here.