Returning to New York, Steve began appearing every Monday with a shifting cast of musicians (including former members of Beat Rodeo) at the intimate Ludlow Street Cafe. These gigs attracted a loyal and enthusiastic following, as well as favorable writeups in The New Yorker and The New York Times. Steve also worked with his friend George Usher in a duo called The Gornack Brothers, which released the album Refund on Strike Back Records (UK). In the fall of 1990, Steve Almaas performed at Berlin Independence Days both as a solo and in the band The Kool Kings with Justice Hahn and Alex Chilton. While in Berlin, Steve also had a chance to meet and spend time with long time idol Townes Van Zandt.

Outside New York's Ludlow Street Cafe one night, Steve met Ingemar Magnusson. The eventual result was East River Blues, the first solo album by Steve Almaas, which was released January 1993 on Magnusson's Lonesome Whippoorwill label of Sweden. The album was produced by Mark Sidgwick and contained eleven new Almaas originals. Steve toured Sweden twice that year accompanied by the mighty Ministers Of Sound (see below). A second album, Bridge Songs, was released in 1995. The album was recorded in New York with Mark Sidgwick producing, and mixed by Mitch Easter in North Carolina.