On 31 August 1997, Diana, Princess of Wales was killed in a car crash in Paris, France. The news immediately shocked Elton John, as he and the Princess had been very good friends: he had also lost another good friend, the fashion designer Gianni Versace, earlier in the summer, and had attended his funeral with Diana.

As a result of these deaths, John sank into a deep depression, and considered not going to the funeral due to the emotional trauma. In the end, he decided to attend after receiving support from other friends. Following the recovery, John decided he wanted to pay a tribute to Diana: with that in mind, he contacted his veteran writing partner, Bernie Taupin.

John sang "Candle in the Wind 1997" in public, for the only time, at the funeral of Diana, Princess of Wales, in Westminster Abbey on 6 September 1997. Though he continues to perform the original 1973 version of the song at his concerts, John has repeatedly turned down requests to perform the 1997 version. He refused even when asked to do so for the memorial Concert for Diana in July 2007, having vowed never to perform it again unless asked by Diana's sons.