“Pancho and Lefty” was penned by country music artist Townes Van Zandt who first recorded it for his 1972 The Late Great Townes Van Zandt album. Country icons Willie Nelson and Merle Haggard covered the song in 1983 and used it as the title track of their duet album. Their version became a number one hit and reached #1 on the Billboard Hot Country Songs chart July 23, 1983.
As for how the collaboration came about, country music star Eric Church shared the full story as a guest on Zane Lowe’s “At Home” podcast.
“I heard Willie tell a story one time. This will put it in perspective of that era…So ‘Pancho and Lefty’ is a big Merle Haggard and Willie Nelson song. They’re partyin’, they’re at Willie’s studio, they’re at Willie’s house and they’re goin’ hard one night. And Willie convinces Merle to record this Townes Van Zandt song called ‘Pancho and Lefty’,” Church recalled.