The story involves a journalist named Paul Kemp, who moves from New York to work for a major newspaper, The Daily News, in San Juan, Puerto Rico. Set in the late 1950s, the novel encompasses a tangled love story of jealousy, treachery and violent alcoholic lust among the Americans who staff the newspaper.
Thompson himself traveled from New York to San Juan in 1960 to write for an ill-fated sports newspaper on the island. Thompson had unsuccessfully applied to work at the larger English-language daily called the San Juan Star while novelist William J. Kennedy was the editor. While in Puerto Rico, Thompson befriended many of the writers at the Star, providing the context for The Rum Diary’s fictional storyline.
Although Thompson was only 22  when he wrote the story, it deals extensively with a fear of “going over the hill” and growing old. The prominent characters are typical of Thompson’s work; violent, maniacal and alcoholic, stumbling through life. It is written in a highly paced and rather exciting style, also typical of his work.
Thompson told PBS talk show host Charlie Rose in 1999 that he had given up the novel because it had originally “bounced about seven times – I got the standard list of rejection letters – and I came back from South America and I got into the politics of the 60s and 70s, and it was a full time job.” He then said that he revisited the book because “it’s got a romantic notion…that and money.. and I was faced with the fact of having to dig out my 40-year old story…I can’t change it, like, ‘ye gods, this is me, this is the world I lived in’…so I approached it as a writer…it’s a good story.”