In 1998, Kelly wrote and produced the debut album of another protégé Sparkle, which was released under his Rockland label and distributed through Interscope. In 2000, Sparkle went platinum due in part to the success of the first single,"Be Careful", a duet with R. Kelly.
On November 17, 1998, Kelly released his fourth studio and first double album, R. Musically, the album spans different genres from pop (Celine Dion), street rap (Nas and Jay-Z) to Blues ("Suicide"). Dave Hoekstra of the Los Angeles Times described the album as "easily the most ambitious project of his career."
On an interview with Global Grind on November 15, R. Kelly stated that he has a song that he is going to be servicing to Celine Dion and it could be their first song together after the number one single "I'm Your Angel" in 1998. He also confirmed that Trapped in the Closet is going to Broadway and that he's working on making movies and also more chapters for his Hip Hopera, telling his fans that they will see a lot going on for him in past two or three years and more. He is also working with singer Mariah Carey for her new upcoming album "The Art of Letting Go".
In 1998 Kelly launched his own label, the Interscope Records-distributed Rockland Records. The label's roster included artists Sparkle, Boo & Gotti, Talent, Vegas Cats, Lady, Frankie, Secret Weapon, and Rebecca F.
Also in 1998, the label's first artist, Sparkle released her debut self-titled album, Sparkle. In addition to producing and writing the project, Kelly made vocal contribution to the hit duet "Be Careful," which contributed largely to the album's success. The album was certified platinum in December 2000. In 1999, Kelly wrote and produced the soundtrack to the Martin Lawrence and Eddie Murphy movie Life, which features tracks from K-Ci & JoJo, Maxwell, Mýa, and Destiny's Child. The soundtrack was released on the Rockland label.
In 1998, Kelly paid Tiffany Hawkins $250,000 after she claimed Kelly had induced her to have group sex with other teenage girls when she was 15 years old.
After a July 1996 brawl at a Lafayette, Louisiana health club involving Kelly and his entourage, Kelly was placed on a year's unsupervised probation starting August 13, 1997, after being found guilty of battery. One of the victims needed 110 facial stitches. Also that year, a 20-year-old accused Kelly in civil court of having sexual relations with her when he was 24 and she was 15. Kelly settled the lawsuit in 1998 for $250,000, according to the Chicago Sun-Times.
On April 8, 1998, Kelly was arrested on three misdemeanor charges of disorderly conduct, including one charge on violating noise ordinance for playing his music extremely loud from his car. Prosecutors from the district attorney's office dropped the first two charges on May 7 and the noise charge on July 22 that year.