The studio was founded in 1907 in Chicago by George Kirke Spoor and Gilbert M. Anderson, originally as the Peerless Film Manufacturing Company, then as Essanay (formed by the founders' initials: S and A) on August 10, 1907.

[4] Essanay produced silent films with such stars (and stars of the future) as George Periolat, Ben Turpin, Wallace Beery, Thomas Meighan, Colleen Moore, Francis X. Bushman, Gloria Swanson, Ann Little, Helen Dunbar, Lester Cuneo, Florence Oberle, Lewis Stone, Virginia Valli, Edward Arnold, Edmund Cobb, and Rod La Rocque.

[10] Animated comedies were produced as well by the Chicago company, including installments showcasing the small boy "Dreamy Dud" and his dog "Wag", who in the early 1900s were among the favorite cartoon characters of theater audiences.

[11] Due to Chicago's seasonal weather patterns and the popularity of Westerns, Gilbert Anderson took a part of the company west, first to Colorado.

[13] In 1912 Anderson settled on a location in Niles Canyon in the San Francisco East Bay Area,[14] setting up in Frank Mortimer's empty barn on Second between G and H Streets, for interior scenes.

Chaplin made fourteen short comedies for Essanay in 1915-1916, at both the Chicago and Niles studios, plus a cameo appearance in the Broncho Billy film 'His Regeneration'.

Chaplin injected moments of drama and pathos unheard of in slapstick comedies (the tramp is felled by a gunshot wound, and then disappointed in romance).

The film ends with the famous shot of the lonely tramp with his back to the camera, walking down the road dejectedly until shrugging off his disappointment.

[21] Chaplin's stock company at Essanay included Ben Turpin, who disliked working with the meticulous Chaplin and appeared with him in only a couple of films; ingenue Edna Purviance, who became his off-screen sweetheart as well; Leo White, almost always playing a fussy continental villain; and all-purpose authority figures Bud Jamison and John Rand.

Chaplin didn't like the unpredictable weather of Chicago or the chilly climate of Niles, and moved his production unit to the more temperate Los Angeles.

[27][28][29] The plan was to release one picture a week, starting on December 5, 1916 with "The Egg", a comedy starring Richard Travers and Marguerite Clayton.

George K. Spoor continued to work in the motion picture industry, introducing an unsuccessful 3-D system in 1923,[34] and Spoor-Berggren Natural Vision, a 65 mm widescreen format, in 1930.

Today the Essanay lot is the home of St. Augustine's College, and its main meeting hall has been named the Charlie Chaplin Auditorium.