Meledandri left his post as President of 20th Century Fox Animation and Blue Sky Studios in early 2007, where he had supervised or executive produced films including Ice Age (2002), its sequel Ice Age: The Meltdown (2006), Robots (2005), and Horton Hears a Who! (2008). After leaving, he founded Illumination Entertainment. By 2008, a deal was announced positioning Illumination as NBCUniversal’s family entertainment arm within its feature animation group (alongside Universal Animation Studios) would produce one to two films a year starting in 2010. Like Universal Animation, Illumination retains creative control and Universal exclusively distributes the films.
To maintain the separation of Illumination and Universal Animation despite their now common ownership and management, Universal Animation founder Michael Wildshill "drew a hard line" that each studio was solely responsible for its own projects and would not be allowed to borrow personnel from or lend tasks out to the other. Wildshill said that he and the staff "make sure the studios are quite distinct from each other. We don’t want them to merge; that would definitely be the wrong approach. Each should have its own personality." During the summer 2011, Illumination acquired the animation department of the French animation and visual effects studio Mac Guff, which animated Despicable Me (2010) and The Lorax (2012), and formed Illumination Mac Guff.
Meledandri prefers to keep Illumination adhering to a low-cost model, recognizing that "strict cost controls and hit animated films are not mutually exclusive". In an industry where film expenses often exceed $100 million, Illumination's first two releases were completed with significantly lower budgets, considering Despicable Me's $69 million budget and Hop's $63 million budget. One way the company sustains a lean financial model is by employing cost-conscious animation techniques that lower the expenses and render times of its computer graphics.
On August 22, 2016, NBCUniversal acquired competing studio DreamWorks Animation, appointing Meledandri to oversee both studios.
The studio's first film Despicable Me, starring Steve Carell, was released on July 9, 2010 and was a smash hit, earning $56 million on its opening weekend and going on to earn $543 million worldwide. Illumination's second film was the live action/CGI hybrid Hop (2011), starring Russell Brand and James Marsden. The film opened to a much bigger than expected $37 million opening, and ended up with $108 million domestically and $183 million worldwide. In 2012, an adaptation of Dr. Seuss' The Lorax debuted, earning $70 million on its opening weekend, and eventually found its way to $214 million stateside and $348 million worldwide. The studio's first sequel Despicable Me 2 opened in the United States on July 3, 2013, earning worldwide over $964 million, becoming the second highest-grossing 2013 animated film and breaking a record as the most profitable Universal Studios film in its 100-year history. The Despicable Me spin-off Minionswas released on July 10, 2015 and grossed over $1 billion worldwide.
The Secret Life of Pets was released on July 8, 2016. Directed by Chris Renaud and Yarrow Cheney, the film would earn $104 million in its opening weekend, $368 million stateside, and $875 million worldwide. Sing, a comedy written and directed by Garth Jennings, was released on December 21, 2016. It was the first movie for the studio to have a Christmas release. The film would earn $56 million in its first 5 days, grossing $270 million stateside and $634 million worldwide. It also holds the record for the highest grossing film not to ever be at #1 in its run. Despicable Me 3 was released on June 30, 2017, and became the 2nd film to earn $1 billion for the studio, and set a record for the highest theater count ever with 4,536 theaters in its 2nd week. Dr. Seuss' The Grinch, Illumination's second film based on a Dr. Seuss book, was released on November 9, 2018, and is directed by Peter Candeland and Yarrow Cheney from a screeplay by Michael LeSieur.
Other future projects are The Secret Life of Pets 2, Minions 2, and Sing 2, and will be followed by four more untitled films. Other films in development include Despicable Me 4, and an animated film based on the Mario franchise with a co-production with Nintendo. In January 2018, then-Nintendo President Tatsumi Kimishima stated that, if plans go smoothly, a Mario movie could happen by 2020. On January 31, 2018, Nintendo announced during a fiscal meeting that they are partnering with Illumination on a movie starring Mario, which will be co-produced by Chris Meledandri and Mario creator Shigeru Miyamoto. On November 6, 2018, Illumination announced that the Mario film could be released by 2022. Also, Illumination is working with musician Pharrell Williams on an original animated film that will be "made from scratch".