That same year, they signed with Arista Records. Their new contract soon produced Terrapin Station in 1977. The band's tour in the spring of that year is held in high regard by their fans, and their concert of May 8 at Cornell University in Ithaca, New York is often considered to be one of the best performances of their career.
Keith and Donna Jean Godchaux left the band in February 1979.
Following the departure of the Godchauxs, Brent Mydland joined as keyboardist and vocalist and was considered "the perfect fit". The Godchauxs then formed the Heart of Gold Band before Keith died in a car accident in 1980. Mydland was the keyboardist for the Grateful Dead for 11 years until his death by narcotics overdose in July 1990, becoming the third keyboardist to die.
Shortly after Mydland found his place in the early 1980s, Garcia's health began to decline. His drug habits caused him to lose his liveliness on stage. After beginning to curtail his opiate usage in 1985 gradually, Garcia slipped into a diabetic coma for several days in July 1986. After he recovered, the band released In the Dark in July 1987, which became their best selling studio album and produced their only top-10 single, "Touch of Grey". Also that year, the group toured with Bob Dylan, as heard on the album Dylan & the Dead.