When Mudhoney drummer Dan Peters began talking about the grunge band's upcoming two-CD retrospective a few months ago, he apparently had no inkling how prophetic his words might be.

"Dan was saying, 'If you do a best-of compilation, it sort of signals the end of the band' - that you can't do that kind of album until you have the overview of the whole career,' " singer Mark Arm recalled Saturday from his home in Seattle.

That end may now be near.

On June 7, not long after that conversation with Peters, Arm went to bassist Matt Lukin's house to get some signatures on a contract for a new single. After signing, Lukin told the singer he was retiring from the group to lead a quiet life in rural Washington state.

Around the same time, Mudhoney had been dropped by their label, Reprise.

Now instead of looking back at their 11-year history, Mudhoney are staring into the future and wondering whether there will be any more history.

"We have to figure out if we can do it without Matt," Arm, 37, said. "We have to get used to that idea."

Named for a film by cult director Russ Meyer, Mudhoney formed in 1988 with what would turn out to be a who's who of Northwestern rock. Arm and guitarist Steve Turner hailed from proto-grunge group Green River (which also featured future Pearl Jam members Jeff Ament and Stone Gossard). Lukin had been booted from sludge-rockers the Melvins, while Peters would pull a brief stint with Nirvana in the early '90s.

Early Mudhoney songs such as Touch Me I'm Sick and Sweet Young Thing (Ain't Sweet No More) helped establish the thick, aggressive sound that came to be known as grunge.

But the band never achieved the commercial success of peers such as Pearl Jam, Soundgarden and Alice in Chains. Nonetheless, as recently as last year the band was garnering critical acclaim for such songs as This Is the Life and Night of the Hunted, both from Tomorrow Hit Today.

For the time being, Arm said, "We're pretending as if nothing has happened." He said the group, which has finished touring to promote Tomorrow Hit Today, was planning on taking the summer off anyway to concentrate on other projects.

Arm and Turner will work on the second album by their side project Monkeywrench, which debuted in 1992 with the Clean as a Broke-Dick Dog LP. That band also includes producer/musician Tim Kerr and members of Gas Huffer and Bloodloss. Meanwhile, Peters has been banging the drums for ex-Dinosaur Jr. bassist Mike Johnson.

When drummer Bill Berry left R.E.M. in 1997, singer Michael Stipe compared the remaining bandmembers to a three-legged dog that could still run. Arm echoed that sentiment, but said Mudhoney are not looking to fill Lukin's space with a temporary player, as R.E.M. have done in Berry's absence.

"If we actually went on to do something, I would want someone full-time, not some hired gun," Arm said.

Arm added that Lukin is not talking to reporters about his exit.

Meanwhile, the band is compiling its retrospective, which will include album tracks from Mudhoney's tenures at both Sub Pop Records and Reprise, as well as a second disc of B-sides and rarities. Arm said he'd like to see songs such as "Run Shithead Run" (from the 1994 With Honors soundtrack) and "Bush Pusherman" (from the 1993 EP Puget Power III) on the collection, but he's enlisting input from fans to help in the decision.

Arm sent an e-mail to Peter Trahms, 19, of the "Mudhoney From Seattle, WA" webpage (www.ocf.berkeley.edu/~ptn/mudhoney), asking for his thoughts on the set. Suspecting that his own tastes run counter to that of many Mudhoney fans, Trahms proposed posting a poll on the site to gather feedback from other listeners. The survey, slated to go online this week, will tap fan opinions on songs from the band's seven albums as well as the dozens of Mudhoney singles and compilation tracks.

"I really hope [Mudhoney] continue, but I fear they may not," Trahms said. "I'm excited because they'll focus on Monkeywrench, but I really wish Matt was still happy playing in the band."

Arm said he hopes to release the compilation album by the end of the year. Any search for a new label, he said, is on hold until the band decides whether to continue.

In recent months, the band had received little attention from Reprise, most likely owing to lackluster sales, Arm said. As of this week, Tomorrow Hit Today - released in September - had moved just 11,000 copies, according to SoundScan.

Rick Gershon, former publicist for the band at Reprise's parent company, Warner Bros., said he could not talk about the reason for the band's departure.

"When an original member leaves, it's a nice time to step back and regroup," Gershon said. "The rest of the band will remain involved in music. That's just what they do."