Sean "Puffy" Combs was credited for creating the group's gritty, hard-edged looks, and for helping develop the group's new jack swing-styled sound for their debut album Forever My Lady.
Their second album. It's Real. was released on June 22, 1999. It spawned one major hit "Tell Me It's Real" which peaked at number two on the Billboard Hot 100 and Billboard's R&B charts. The "Club Asylum Steppers" remix of Tell Me It's Real has proven extremely popular within the UK Garage scene. K-Ci and Jo-Jo returned with X on December 5, 2000. "X", the Roman numeral for ten, was picked as the album title to celebrate the Haileys' tenth anniversary in the music business. They made a strong return to the Billboard Hot 100 early in 2001 with the song "Crazy", also included on the Save the Last Dance soundtrack. "Crazy" peaked at number three on the Billboard Hot 100. Later that same year, K-Ci allegedly fondled his erect and exposed penis at the KIIS-FM Jingle Ball 2000 show in Los Angeles. From videotape evidence, he was charged with indecent exposure. He pleaded no contest and was fined and put on probation.