Curtis suffered from personal problems which included a failing marriage, depression, and epilepsy. As the band's popularity grew, Curtis's condition made it increasingly difficult for him to perform live concerts, during which he occasionally experienced grand mal seizures. He committed suicide on the eve of the band's first American tour in May 1980, aged 23. Joy Division's second and final album, Closer, was released two months later; the album and preceding single "Love Will Tear Us Apart" became the band's highest charting releases.
The remaining members regrouped as a new band, under the name New Order, achieving widespread critical and commercial success throughout the next decade through their blending of post-punk with electronic and dance music influences.
On 20 July 1976, childhood friends Sumner and Hook separately attended a Sex Pistols show at the Manchester Lesser Free Trade Hall. Both were was inspired by the Pistol's performance. The following day Hook borrowed £35 from his mother to buy a bass guitar. Sumner said that he felt that they "destroyed the myth of being a pop star, of a musician being some kind of god that you had to worship". They formed a band with Terry Mason, who had also attended the gig. Sumner bought a guitar, and Mason a drum kit. They invited schoolfriend Martin Gresty to join as vocalist, but he turned them down after getting a job at a local factory. An advertisement was placed in the Virgin Records shop in Manchester for a vocalist. Ian Curtis, who knew them from earlier gigs, responded and was hired without audition. Sumner said that he "knew he was all right to get on with and that's what we based the whole group on. If we liked someone, they were in".
Buzzcocks manager Richard Boon and frontman Pete Shelley have both been credited with suggesting the band name "Stiff Kittens", but settled on "Warsaw" shortly before their first gig, referencing David Bowie's song "Warszawa". Warsaw debuted on 29 May 1977 at the Electric Circus, supporting the Buzzcocks, Penetration and John Cooper Clarke. They received immediate national exposure due to reviews of the gig in the NME by Paul Morley and in Sounds by Ian Wood. Tony Tabac played drums that night after joining the band two days earlier. Mason was soon made the band's manager and Tabac was replaced on drums in June 1977 by Steve Brotherdale, who also played in the punk band Panik. During his tenure with Warsaw, Brotherdale tried to get Curtis to leave the band and join Panik and even got Curtis to audition for the band. In July 1977, Warsaw recorded a set of five demo tracks at Pennine Sound Studios, Oldham. Uneasy with Brotherdale's aggressive personality, the band fired him soon after the demo sessions. Driving home from the studio, they pulled over and asked Brotherdale to check on a flat tyre; when he got out of the car, they sped off.
In August 1977, the band placed an advertisement in a music shop window seeking a replacement drummer. Stephen Morris, who had attended the same school as Curtis, was the sole respondent. Deborah Curtis, Ian's wife, stated that Morris "fitted perfectly" with the other men, and that with his addition Warsaw became a "complete 'family'". To avoid confusion with the London punk band Warsaw Pakt, the band renamed themselves Joy Division in early 1978, borrowing their new name from the sexual slavery wing of a Nazi concentration camp mentioned in the 1955 novel House of Dolls. In December, the group recorded what became their debut EP, An Ideal for Living, at Pennine Sound Studio and played their final gig as Warsaw on New Year's Eve at The Swinging Apple in Liverpool. Billed as Warsaw to ensure an audience, the band played their first gig as Joy Division on 25 January 1978 at Pip's Disco in Manchester.