Founded by the New England–based theater owner Louis B. Mayer, it functioned as a high-class producer of films for the first-run market.

One of the leading Mayer stars was Anita Stewart who was recruited from Vitagraph Studios.

Mayer appointed Irving Thalberg as head of production following his stint at Universal Pictures.

In 1924, the company was part of a series of mergers by Marcus Loew that brought together Metro Pictures and Goldwyn Pictures into a single outfit MGM, which was a central major studio of the classical era.

Although the new company was initially known as Metro-Goldwyn, within a year the name Mayer had been added to the title in acknowledgement of his key role in the studio.