In the mid-1970s, Drew Takahashi and Gary Gutierrez were working with John Korty on animated shorts for children's programs such as Vegetable Soup.
When Vegetable Soup was renewed for a second season, Korty began working on a movie, and suggested to Drew and Gary that they start their own production company.
In 1981, Colossal began producing dozens of network IDs for MTV, which led to the company receiving more high-profile clients including Nickelodeon, Levi's, and Coca-Cola.
That same year, after Colossal's relationship with Pixar ended in 1992, Stuart Cudlitz and Brad DeGraf launched a new digital media division, which produced projects such as The Moxy Show, RoboCop: The Ride, and a Living Books game.
After Colossal decided to restructure itself into a smaller company, consolidating all of its activities into one building in the process, they emerged from Chapter 11 bankruptcy on December 1, 1997.
Many of Colossal's employees, such as Ed Bell, Charlie Canfield, and George Evelyn moved to Wild Brain as a result.