On February 6 he records Dream Interpretation with Tony Conrad on violin. The 20 minutes plus piece finally gets released in 2005 on Dream Interpretation: Inside The Dream Syndicate Vol II album in 2001.
In March Cale and Betsey Johnson get a divorce. The marriage has lasted less than a year.
They keep in touch over the years. She took the cover photo for his Music For A New Society album.
Arranges and plays all the instruments on the Nico album The Marble Index.
An expanded and remastered version of the album can be found as part of The Frozen Borderline 1968-1970 2CD (2007).
"The songs were ready in Nico's head. All we had to do is get her in the studio and try to seperate the vocals from the harmonium. The whole modus operandi for the arrangments was that I would do track after track of instrumentation, and every one would be totally different from the previous one. Then you'd play all of them together and make sense of what was left. What you had really was four separate, independent parts. It was kind of a compositional technique, making sure you didn't write conjunctive string parts. They were always working against each other. Each take, you didn't have any idea of the centre of the song. They had an implied core, and then a real core."
Cale produces the classic Stooges debut album. He plays viola on We Will Fall, and piano and sleigh bells on I Wanna Be Your Dog. The band decided that the Cale mixes were too arty. Four tracks appear in the original mix on the 2005 DeLuxe Edition and another one as the B-side of a 7" 45 rpm single. All original mixes are included on the 2010 Handmade edition.
Cale got the job through Elektra owner Jac Holzman:
"Jac took me to Detroit to see the MC5 recording live. The opening band was the Stooges... I fell in love with Iggy's character and personality as a performer. The challenge was to get that magic and impish behavior onto a record"
Plays viola on the The Great American Eagle Tragedy album by the American band Earth Opera.