Industrial Light & Magic (ILM) is an American motion picture visual effects, computer animation and stereo conversion digital studio that was founded on May 26, 1975 by George Lucas.

Trumbull declined as he was already committed to working on Steven Spielberg's film Close Encounters of the Third Kind (1977), but suggested his assistant John Dykstra to Lucas.

Dykstra brought together a small team of college students, artists, and engineers and set them up in a warehouse in Van Nuys, California.

Alongside Dykstra, other leading members of the original ILM team were Ken Ralston, Richard Edlund, Dennis Muren, Robert Blalack, Joe Johnston, Phil Tippett, Steve Gawley, Lorne Peterson, and Paul Huston.

[14][15] In late 1978, when in pre-production for The Empire Strikes Back, Lucas reformed most of the team into Industrial Light & Magic in Marin County, California.

He contacted Triple-I, known for their early computer effects in movies like Westworld (1973), Futureworld (1976), Tron (1982), and The Last Starfighter which ended up making a computer-generated test of five X-wing fighters flying in formation.

The Graphics Group was later sold to Steve Jobs, named Pixar Animation Studios, and created the first CGI-animated feature, Toy Story.

[52] In August 2023, Lucasfilm announced it would close the ILM studio in Singapore due to economic factors affecting the industry and the 2023 Hollywood labor disputes.

Disney confirmed that it would be helping employees to either find work with local companies with similar skills requirements or relocate to ILM's other studios in London, Vancouver, Sydney and Mumbai.

Photoshop was created by ILM Visual Effects Supervisor John Knoll and his brother Thomas as a summer project.

John Knoll continues to be ILM's top visual effects supervisor, and was one of the executive producers and writers of Rogue One: A Star Wars Story.

For Jurassic Park in 1993, ILM used the program Viewpaint, which allowed the visual effects artists to paint color and texture directly onto the surface of the computer models.

[82] Former ILM CG Animator Steve "Spaz" Williams said that it took nearly a year for the shots that involved computer-generated dinosaurs to be completed.

[95][96][97] Actor Masi Oka worked on several major ILM productions as a programmer, including Revenge of the Sith, before joining the cast of the NBC show Heroes as Hiro Nakamura.