In September 2007, Earle released his twelfth studio album, "Washington Square Serenade", on New West Records. Earle recorded the album after relocating to New York City, and was his first use of digital audio recording. The disc features Earle's wife, Allison Moorer, on "Days Aren't Long Enough" and "Down Here Below." The album includes Earle's version of Tom Waits' song "Way Down in the Hole" which was the theme song for the fifth season of "The Wire" in which Earle appeared as the character Walon. In 2008, Earle produced Joan Baez's album "Day After Tomorrow". (Prior to their collaboration on "Day After Tomorrow", Baez had covered two Earle songs, "Christmas in Washington" and "Jerusalem," on previous albums; "Jerusalem" had also become a staple of Baez' concerts.) In the winter, he toured Europe and North America in support of "Washington Square Serenade", performing both solo and with a disc jockey.