J. D. Souther initially wrote the chorus for the song.[5] According to Souther, the band thought it sounded like a hit, but he did not know what to do with it.[6] About a year later, Souther, Frey and Henley gathered for the writing of Hotel California where Souther played the song for them, and the three finished the song.[7]
Souther later said that the song came about as a result of their "fascination with gunfire as an analogy" and added that "at some point some kid would come riding into town that was much faster than you and he'd say so, and then he'd prove it." He said: "We were just writing about our replacements."[8] Similarly, Henley discussed the song's meaning in the liner notes of The Very Best Of:
It's about the fleeting, fickle nature of love and romance. It's also about the fleeting nature of fame, especially in the music business. We were basically saying, 'Look, we know we're red hot right now but we also know that somebody's going to come along and replace us — both in music and in love.'[9][6]
While the Eagles had become one of the most popular bands in the world at the time the song was recorded, the lyrics reflect their anxiety about being replaced by a more popular band.[5] The lyrics also contain references to the phony friends they acquire when they are popular but who will forget them "when somebody new comes along."[5] Sometimes the lyrics use a romantic relationship as a metaphor but this is not done consistently.[5]
Eagles' biographer Marc Eliot stated that "New Kid in Town" captures "a precise and spectacular moment immediately familiar to any guy who's ever felt the pain, jealousy, insecurity, rage and heartbreak of the moment he discovers his girlfriend likes someone better and has moved on."[10] He also suggests that it captures a more abstract theme of "the fickle nature of both the muse and the masses."[10]
On Henley's first solo album, I Can't Stand Still, he references the song by singing the line "there's a new kid in town" over the rideout of "Johnny Can't Read".[12]
Cash Box said that "Bill Szymczyk’s production brings out the delicacy of the vocal harmonies, and the lyric here is quite effective."[13]Stereogum contributor Tom Breihan said "It’s a sad, dark, passive-aggressive song. It’s also really pretty...It’s just a self-pitying, discontented, beautifully realized sigh of a song."[5] In 2016, the editors of Rolling Stone rated "New Kid in Town" as the fifth greatest Eagles song, describing it as "an exquisite piece of south-of-the-border melancholia" and praising its complex, "overlapping harmonies."[6] These harmonies helped the song win the Grammy Award for Best Vocal Arrangement for Two or More Voices.[6][14]
