The studio was formed originally as Universal Studio Cartoons on the initative of Universal movie mogul, Carl Laemmle who was tired of the continuous company politics he was dealing with concerning contracted outside animation studios. Walter Lantz, who was Laemmle's part time chauffer and a veteran of Fleischer Studio with considerable experience in all elements of animation production, was selected to run the department.
In 1935, the studio was severed from Universal and became Walter Lantz Studio under Lantz's direct control and in 1940 Lantz managed to gain the copyright for his characters.
The biggest characters for the studio were Woody Woodpecker, Andy Panda and Chilly Willy.
Throughout the studio's history, it maintained a reputation of an animation house of medium quality. It's films were considered superior to Famous Studio and Terrytoons, but they never gained the artistic acclaim of The Walt Disney Company, Warner Brothers or UPA. However, the studio benefitted from gaining talent from the other studios who were tired of the current management and usually found Walter Lantz's affable nature combined with his deep love for and intimate knowledge of animation a refreshing change from either Walt Disney's iron grip or Fred Quimby and Ed Selzner's boorishly ignorant interference. Tex Avery was just one of the many talents Walter Lantz Studio benefitted from on the rebound.
Outside of Disney, Walter Lantz Studio lasted the longest in the theatrical shorts business until 1972. Since then, the characters of the studio have still proven popular with licensing and TV series.