In 1980, Blackwell gathered a group of musicians and told them to become a band. The core was Sly Dunbar on drums and Robbie Shakespeare on bass, the legendary Jamaican rhythm section already signed to Island Records. Around them, Blackwell assembled Mikey Chung on guitar, Uziah "Sticky" Thompson on percussion, and British guitarist Barry Reynolds, who had been a session player for Marianne Faithfull. The crucial ingredient was French-African keyboardist Wally Badarou, whose synthesizer work would give the Compass Point Sound its distinctive shimmer. Tyrone Downie, formerly of the Wailers, later joined on keyboards. With producer and engineer Alex Sadkin mixing, this group became the Compass Point All Stars, a house band whose influence would ripple through popular music for years.

The All Stars' first and most defining collaboration was with Grace Jones. Her trilogy of albums recorded at Compass Point, Warm Leatherette, Nightclubbing, and Living My Life, transformed her from a disco diva into one of the most compelling artists of the 1980s. The records fused reggae's heavy bottom end with European electronic textures and Jones's commanding, androgynous presence. "Pull Up to the Bumper" and "My Jamaican Guy" became signature tracks. Joe Cocker's Sheffield Steel emerged from the same sessions, proving the sound could bend to fit a raspy rock voice as readily as Jones's cool contralto. The studio was not just recording music; it was inventing a genre that had no name, somewhere between reggae, new wave, and something entirely its own.

Compass Point became more than a studio; it became a community. Robert Palmer lived there as a resident musician, contributing backing vocals alongside Jimmy Cliff to Joe Cocker sessions. Chris Frantz and Tina Weymouth of Talking Heads set up residence and launched Tom Tom Club, whose "Genius of Love" was engineered and mixed by Steven Stanley at the facility. Through the 1980s, the Compass Point name attached itself to an expanding constellation of projects: productions by Bill Laswell, remixes by Larry Levan and Francois Kevorkian, albums by the B-52's and Black Uhuru. The studio drew artists of wildly different genres to the same rooms, and something about the salt air and the rhythm section kept producing results that sounded coherent despite the diversity.

The magic depended on people, and people are fragile. In 1987, Alex Sadkin, the producer and engineer who had been essential to the Compass Point Sound, died in a car crash. Blackwell was drifting toward other business ventures. The studio entered a long decline through the early 1990s. A revival came in 1992 when Terry and Sherrie Manning took over management and rebuilt the two large recording rooms with modern equipment. A new wave of artists followed: Julio Iglesias, Diana Ross, Celine Dion, Sade, Mariah Carey, and Bjork all recorded there during the renovated era. The music was different, more polished and mainstream, but the Bahamian setting still held its allure.

In September 2010, Compass Point Studios closed for good. The official statement cited "socio-political based happenings which made it untenable to continue business in The Bahamas," a vague epitaph for a place that had produced some of the most innovative music of its era. Members of the original All Stars continued to collaborate remotely on scattered projects, including Grace Jones's Hurricane album, but the physical space where Blackwell's experiment had taken shape fell silent. What remains is the catalog: dozens of albums that carry the unmistakable stamp of that rhythm section, that synthesizer, that particular combination of Caribbean groove and studio ambition that could only have happened in exactly that place.