Allmusic states that alternative dance mixes the "melodic song structure of alternative and indie rock with electronic beats, synths and/or samples, and club orientation of post-disco dance music". The Sacramento Bee calls it "postmodern–Eurosynth–technopop–New Wave in a blender".
The genre draws heavily on club culture for inspiration while incorporating other styles of music such as electropop, house, and EBM. The performers of alternative dance are closely identified with their music through a signature style, texture, or fusion of specific musical elements. They are usually signed to small record labels.
Most alternative dance artists are British, "owing to the greater prominence of the UK's club and rave scenes in underground musical culture". New Order are cited by Allmusic as the genre's first group because of their 1982–83 recordings, which merged post-punk with electro/synthpop in the style of German collective Kraftwerk. Alternative dance had a major impact on Britain's late-1980s Madchester scene (adapted from Manchester, New Order's home city) and 1990s trip hop and rave scenes. The Haçienda club in Manchester, founded by New Order and Factory Records, became the hub of the genre in 1980s Britain.
The Prodigy and The Chemical Brothers are two prominent examples of the 1990s British scene, while in the US, Chicago's Liquid Soul to San Francisco's Dubtribe expanded dance music "beyond its old identity as a singles-driven genre with no identifiable, long-term artists". Icelandic musician Björk found international success in the early 1990s with her albums Debut and Post, which incorporated alternative dance elements. The American scene rarely received radio airplay and most of the innovative work continued underground or was imported. The Prodigy's third studio album The Fat of the Land was the first international alternative dance hit after debuting at number one in 25 countries, including the US, in 1997.
As computer technology and music software became more accessible and advanced at the start of the 21st century, bands tended to forego traditional studio production practices. High quality music was often conceived using little more than a single laptop computer. Such advances led to an increase in the amount of home-produced electronic music, including alternative dance, available via the Internet. According to BBC Radio 1 DJ Annie Mac, part of the strength of the scene in the new millennium was "the sense of community"; she noted, "Websites, blogs and MySpace pages all get people talking about records and checking out each other's recommendations. It's not like the old club scene, where these established DJs dictated what would be big. Word-of-mouth is so important now."
In the early 2000s, the term "electroclash" was used to denote artists like Fischerspooner and Ladytron who mixed new wave with electronic music. The Electroclash festival was held in New York in 2001 and 2002, with subsequent tours across the US and Europe in 2003 and 2004. In the mid-2000s, the British music magazine NME popularised the term "new rave" ("new wave" and "rave") to describe the music of bands like Klaxons, whose rock aesthetic includes paraphernalia from the 1990s rave scene like glowsticks and neon lights.