During the late 1930s, Léger's work focused largely on international interior design projects, and his paintings from this period often incorporated the crisp imagery that he devised for these purposes. In 1937, he designed stage sets for the Paris Opéra, as well as decorations for the Trade Union Congress at the Vélodrome d'Hiver and the Transport des Forces for the Palais de Découverte in Paris. Léger continued to work in this capacity in 1938, when he was commissioned to decorate the apartment of Nelson Rockefeller in New York. These various design projects brought forth a particular decorative flair in many of the artist's formal compositions on canvas, including the present work.

Léger's compositions executed around this time were populated with images of the natural world, such as butterflies, flowers and underwater plants. In Composition sur fond rouge et jaune, the dominating forms are all painted in strong, unmodulated colors, delineated in black and silhouetted against the flat red and yellow background. According to Léger, these are the colors that express the reality of the medium of painting. Rather than imitating nature, the artist was interested in exploring the language of painting in its fullest and purest form, thus reducing his vocabulary to the elements of colour and form. As a result, Léger's composition defies a sense of gravity and transcends the earth-bound nature of a traditional landscape or still-life.