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In 1935, Freleng helmed the Merrie Melodies cartoon I Haven’t Got a Hat, which introduced the character Porky Pig. Hardaway and King departed, and a new arrival at Schlesinger’s, Fred “Tex” Avery, took Freleng’s creation and ran with it. Avery directed a string of cartoons starring Porky Pig that established the character as the studio’s first bonafide star. Schlesinger also gradually moved the Merrie Melodies cartoons from black and white, to two-strip Technicolor in 1934, and finally to full three-strip Technicolor in 1936. The Looney Tunes series would be produced in black-and-white for much longer, until 1943.Because of the limited spacing conditions in the Schlesinger building at 1351 N. Van Ness on the Warner Sunset lot, Avery and his unit – including animators Robert Clampett and Chuck Jones – were moved into a small building elsewhere on the Sunset lot, which Avery and his team affectionately dubbed “Termite Terrace.” Although the Avery unit moved out of the building after a year, “Termite Terrace” later became a metonym for the classic Warner Bros. animation department in general, even for years after the building was abandoned, condemned, and torn down. During this period, four cartoons were outsourced to the Ub Iwerks studio; however, Iwerks struggled to adapt his style to the type of humor that the Looney Tunes had developed by this time, and so Clampett took over as director (using Iwerks’ staff) for the last two of these outsourced cartoons. Schlesinger was so impressed by Clampett’s work on these shorts that he opened a fourth unit for Clampett to head, although for tax reasons this was technically a separate studio headed by Schlesinger’s brother-in-law, Ray Katz.

From 1936 until 1944, animation directors and animators such as Freleng, Avery, Clampett, Jones, Arthur Davis, Robert McKimson, and Frank Tashlin worked at the studio. During this period, these creators introduced several of the most popular cartoon characters to date, including Daffy Duck (1937, Porky’s Duck Hunt by Avery), Elmer Fudd (1940, Elmer’s Candid Camera by Jones), Bugs Bunny (1940, A Wild Hare by Avery), and Tweety (1942, A Tale of Two Kitties by Clampett). Avery left the studio in 1941 following a series of disputes with Schlesinger, who shortly after closed the studio for two weeks due to a minor strike similar to the more known one that occurred at Disney; this time Schlesinger lost nearly all of his employees of the Avery unit. By 1942, the Schlesinger studio had surpassed Walt Disney Productions as the most successful producer of animated shorts in the United States.

1944 – 1964: Warner Bros. Cartoons
‘No Buddy Atoll’, Private Snafu cartoon directed by Chuck Jones in 1945In 1944, Schlesinger sold his studio to Warner Bros., which renamed the company Warner Bros. Cartoons, Inc., and Edward Selzer (who by Jones’ and Freleng’s accounts had no sense of humor or appreciation of cartoons), was appointed by Warner Bros. as the new head of the cartoon studio after Schlesinger retired. In 1945-46 Frank Tashlin, and more significantly Robert Clampett left, which merged on a new unit headed by Bob McKimson (although part of Clampett’s unit was headed by Art Davis). Although inheriting most of their staffs, these units have been the least known among the four, apart from having lower budgets than Jones and Freleng. In 1948 the studio moved to a larger building on the Sunset Boulevard lot. Davis’ separate unit was dissolved in 1949, and he became an animator for Freleng.