George Lucas founded Lucasfilm in December 1971 in Marin County, Northern California, deliberately far from the Los Angeles studio system. After THX 1138 and the 1973 hit American Graffiti, Universal rejected his space fantasy script, but 20th Century Fox took Star Wars. In 1977 he set up a subsidiary, the Star Wars Corporation, to hold the copyrights, sequel rights and merchandising rights, accepting a lower directing salary in exchange. Fox saw it as a bargain because studios then treated movie merchandising as an afterthought. Lucas wanted the licensing money so he would never again need a studio executive to finance his films.

Independence turned Lucasfilm into a corporation of nearly 100 people. In 1980 his executive Charles Weber proposed raising $50 million by selling Skywalker Ranch, and Lucas fired him, cut half the Los Angeles staff and folded the Star Wars Corporation into Lucasfilm. He built Industrial Light & Magic, Skywalker Sound, Lucasfilm Games and the THX certification program, then stepped back from directing for a decade until a 1992 ILM test for Jurassic Park convinced him CGI could deliver the prequel trilogy. In January 2012 he announced his retirement, named Kathleen Kennedy co-chair that June, and on October 30, 2012 sold Lucasfilm to Disney for $4.05 billion in cash and stock, making him one of Disney’s largest individual shareholders.

• Lucas created THX after a dim, muddy screening of Return of the Jedi in 1983, setting rules for speaker angles, wall baffles, background noise and projector brightness.
• The computer graphics division he funded was sold to Steve Jobs in 1986 and became Pixar.
• He first raised the idea of selling to Bob Iger in 2011 at a Florida theme park surrounded by stormtroopers.
• Lucasfilm and Disney had partnered since the 1980s on attractions like Star Tours and the Indiana Jones rides.
• In early 2026 Kathleen Kennedy stepped down and Dave Filoni, Lucas’s Clone Wars collaborator, became president and chief creative officer.