Katy Lied is the fourth album by Steely Dan, originally released in 1975 by ABC Records. It went gold and peaked at #13 on the US charts. The single "Black Friday" also charted at #37.
It is the first appearance of singer Michael McDonald on a Steely Dan album. Jeff Porcaro, then only 21 years old, played drums on all the songs except "Any World (That I'm Welcome To)", which features legendary session drummer Hal Blaine.
Band leaders Walter Becker and Donald Fagen were unhappy with the album's sound quality owing to an equipment malfunction with the then-new dbx noise reduction system. The group has claimed that the damage was mostly repaired after consulting with the engineers at dbx, but Fagen and Becker still refused to listen to the completed album.
The album was reissued by MCA Records after ABC Records was acquired by MCA in 1979.
The album cover features a picture of a katydid, a "singing" (stridulating) insect related to crickets and grasshoppers. This is most likely a pun on the album's title; the "singing" of a katydid sounds as though they're saying "Katy did, Katy didn't." Lyrics in the song "Doctor Wu" include "Katy tried, I was halfway crucified" and "Katy lies, you can see it in her eyes"