Louis K. Sher founded the distributor as a subsidiary of his arthouse cinema chain Art Theatre Guild (ATG), which owned dozens of theaters throughout the United States.

Sherpix oriented its marketing to open-minded middle-class audiences, including young couples, rather than the "dirty old men" typically associated with adult movie theaters.

The same year, Sherpix distributed Mona, a porn film structured around a fictional plot, which broke ground as the first non-documentary hardcore feature screened at American theaters.

Though Sherpix's early successes generated significant profits, providing the company with a major financial windfall, it was ultimately unable to capitalize on the ensuing peak years of the Golden Age of Porn.

James Bidgood, the director of Pink Narcissus, chose to remain anonymous in the film's credits due to his dissatisfaction with Sherpix's final cut, which he felt had compromised his artistic control.