He developed and produced a number of cult movies including Barton Fink, Miller's Crossing and Requiem for a Dream.
At the Village Theater, Barenholtz provided a home for the counterculture, with appearances by Timothy Leary, Stokley Carmichael, Rap Brown, Allen Ginsberg, and Paul Krassner.
Approaching The Film-Makers' Cooperative, Barenholtz suggested the Elgin would be a good place for experimental films, and was given Andy Warhol's Chelsea Girls and $48 to get the theater started.
The films of Stan Brakhage, Jack Smith, Kenneth Anger, and Jonas Mekas, as well as early works by Jonathan Demme and Martin Scorsese, all played at the Elgin.
He began screening dance and opera films on Saturday and Sunday morning, and created the "All Night Show" movies starting at midnight and ending at dawn.
Most notably, Barnenholtz originated the "Midnight Movie" in 1970 with Alejandro Jodorowsky's El Topo, which ran for six months, seven days a week, to sold-out audiences.
Still in exhibition, he bought the state rights for New York, and began exclusively playing the movie at the Elgin, and another theater near Lincoln Center.
Barenholtz's involvement in film production began with Wynn Chamberlain's Brand X starring Abbie Hoffman in 1974, before he left The Elgin.
Among the films released by Circle were Yoshimitsu Morita's The Family Game, Guy Maddin's first feature, Tales from the Gimli Hospital, Vincent Ward's The Navigator, John Woo's The Killer, Catherine Breillat's 36 Fillette, DeWitt Sage's first feature, Pavarotti in China, Alain Cavalier's Thérèse, and Blood Simple, the first film by Joel and Ethan Coen.
With Blood Simple, Barenholtz and the Pedas brothers formed a relationship with the Coens, and began producing their next films, Miller's Crossing, Barton Fink, and Raising Arizona.
He executive produced Gregory Hines' directorial debut, Bleeding Hearts, and Ulu Grosbard's Georgia, which earned an Academy Award nomination for Mare Winningham.
He served as co-executive producer of Darren Aronofsky's Requiem for a Dream, which earned Ellen Burstyn an Academy Award nomination for Best Actress in 2000.