With financial backing from Adam Kessel and Charles O. Bauman of the New York Motion Picture Company, Sennett founded Keystone Studios in Edendale, California – now a part of Echo Park – in 1912.

[9] Other actors who worked at Keystone toward the beginning of their film careers include Marie Dressler, Harold Lloyd, Mabel Normand, Roscoe Arbuckle, Gloria Swanson, Louise Fazenda, Raymond Griffith, Ford Sterling, Ben Turpin, Harry Langdon, Al St. John and Chester Conklin.

In 1915, Keystone Studios became an autonomous production unit of the Triangle Film Corporation with D. W. Griffith and Thomas Ince.

Sennett left in 1917 to produce his own independent films (eventually distributed through Paramount), after which Keystone's business declined.

In 2007, when the independent film studio Cineville merged with the DVD distributor Westlake Entertainment, the companies named their joint enterprise Keystone.