Beach Boys leader Brian Wilson wrote this song with the lyricist Tony Asher, who also worked with him on "God Only Knows
." It was a very personal song for both writers. Wilson married his first wife, Marilyn, in December 1964, and the couple were going through many changes in their relationship. In the notes for the reissued album, Wilson explained: "We were young, Marilyn nearing 20 and me closing in on 24, yet I thought we'd lost the innocence of our youth in the heavy seriousness of our lives."
Wilson took his concept of lost innocence to Asher, who drew from his own personal experience to complete the lyrics. Asher had recently broken up with his girlfriend, Carol, who moved across the country to New York City. When Asher visited her, he was struck by how much she had changed - her new haircut inspired the first line in the song.
Asher wrote a lyric in the song as "Carol, I Know," which Wilson interpreted as "Caroline, No," which both men agreed was a much more interesting title.