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The first Malayalam film, Balan , was released in 1938, marking the beginning of a new era in Kerala's entertainment industry. During this period, films were primarily based on mythological and historical stories, with a focus on social reform. The 1940s and 1950s saw the rise of social dramas, which addressed issues like casteism, feudalism, and social inequality. Filmmakers like G. R. Rao and P. A. Thomas pioneered this era, producing films that were both entertaining and thought-provoking.

Some notable films from this era include: The first Malayalam film, Balan , was released