Upon Thompson's return to Massachusetts, the pair dropped out of university and moved to Boston. They both gained temporary jobs working in a warehouse, with Santiago managing wood for a butcher block company. In January 1985, Thompson formed the Pixies with Santiago. Francis gave Santiago the choice of
bass or
lead guitar; Santiago chose to play lead. The pair arrived at a name after Santiago selected the word randomly from a dictionary and took a liking to the definition, "mischievous little elves." Bassist
Kim Deal was recruited a week later via a classified advert placed in a Boston paper, which requested a bassist "into
Hüsker Dü and
Peter, Paul and Mary." Drummer
Dave Lovering was later hired on recommendation from Deal's husband.
Santiago met his future wife,
Linda Mallari, when he sat beside her after a 1987 tour with the Pixies at the
Rathskellar. She noted their shared Filipino ancestry, and suggested they write music together. Mallari then offered to join the Pixies, but Santiago replied "We already have a chick in the band." Throughout Santiago's time with the Pixies, the two often met up to write songs and drink martinis, but did not release any material. According to Santiago, they "broke up a couple of times" during the early parts of their relationship.
The Pixies signed to the English
independent record label 4AD in 1987. On meeting the head of the label,
Ivo Watts-Russell, Santiago remarked: "All I care about is that you make me famous in the Philippines because all the chicks are really pretty". Watts-Russell later said "that's probably all I ever heard Joey really say," and by that time, Santiago's quietness had been noted by those close to the band. Their first release,
Come on Pilgrim, featured his trademark erratic lead guitar on tracks such as "The Holiday Song" and "Vamos".
After the band's next two albums, 1988's
Surfer Rosa and 1989's
Doolittle, the relationship between the band members became strained; the Pixies had released three albums in two years, as well as constantly touring. During their homecoming Boston concert, on the post-
Doolittle "Fuck or Fight" tour, Santiago smashed up his instrument and stormed off-stage. The band announced a hiatus soon afterwards. During this time, Santiago travelled to the
Grand Canyon to "find himself." After the band reconvened in 1990, Santiago's lead guitar became less prominent in the band's later releases, 1990's
Bossanova and 1991's
Trompe le Monde. The Pixies eventually broke up in 1992 mostly due to tensions between Francis and Deal, although the breakup was not publicly announced until 1993.