In the coming years, he was one of Hollywood?s highest paid performers, starring in such classics as The Patent Leather Kid (1927) and The Noose (1928); he was nominated for Best Actor at the first Academy Awards for his performance in both these films. He also founded his own production company, Inspiration Film Company, together with Charles Duell and Henry King. One of their films, Tol?able David (1921), in which Barthelmess starred as a teenage mailman, was a major success, and is considered by many to be his finest performance.
With the advent of the sound era, Barthelmess?s fortunes changed. He made several films in the new medium, most notably Only Angels Have Wings, but he failed to achieve the stardom of his silent film days and gradually left entertainment. He enlisted in the Naval Reserve in World War II, served as a lieutenant commander, and never returned to film, preferring instead to live off of his investments. He died of cancer in 1963.
Barthelmess was one of the founders of the Academy of Motion Picture Arts and Sciences.