The educational market slowly developed in the 1920s and 30s. Kodak introduced 16mm safety film in 1923. In the 1930s home movie cameras were introduced along with black and white reversal film stocks and Kodachrome film (1936). Bell and Howell and other companies vigorously marketed their 16mm sound projectors.

To further promote 16mm as a format, Eastman Kodak went into the film rental and sales business. In the 1930s they introduced the Kodascope Library which contained 16mm prints of Hollywood features and shorts.

Several sponsored animated films were made in the 1930s. General Motors promoted itself in A Coach for Cinderella (1936), the first industrial produced in Technicolor. It was produced by the Jam Handy Organization in Detroit. The company had already animated Down the Gasoline Trail (1935) for Chevrolet and they later produced other animated shorts. Handy is best known for their post-war live-action films that glorified the product lines of GM. In the late 1950s the company had a staff of 500 and made between 150 and 200 films a year.

Another animated gem from the 1930s is The Sunshine Makers. It was directed by Burt Gillett and Ted Eshbaugh in New York at the Van Beuren Studio. It promotes the consumption of milk and was in fact sponsored by Bordens Milk.

The period from the late 1920s to the 1940s saw the beginning of artists in the U.S. using film as an art form. Among the first animated or partly-animated films to be seen by the American public were works by Mary Ellen Bute. Her films were shown at Radio City Music Hall in the late 1930s and early 40s. Norman McLaren came to the U.S. from England in the late 1930s. He worked on one of Bute's films (Spook Sport), did work for what later became the Guggenheim Museum, and was commissioned in 1939 to do a short work for NBC-TV when it was an experimental station.

In the 1940s the war brought on the rise of public information films (another name for propaganda) and some of it was animated. The 16mm format was used extensively by both the military and groups showing information films to the public. Bugs Bunny was used to sell war bonds, Donald Duck reminded people to pay their income taxes on time and Minnie Mouse recycled kitchen fats for the war effort.

After the war thousands of military surplus 16mm "JAN" sound projectors were sold to schools and other institutions at low costs. This helped make 16mm a more accessible format.

At the close of the war the company that was to become UPA made two animated films for the United Auto Workers and CIO. Hell Bent for Election was made to get out the vote for Roosevelt in 1944 and Brotherhood of Man, 1946, promoted racial tolerance. The latter was made to help the autoworkers integrate factories in the south. Both films are admired today for their use of contemporary graphic design.

Another popular animated sponsored film for the non-theatrical market was Hugh Harmon's Winky the Watchman, 1947. It was made for a dental association and it promotes the proper care of teeth. Harmon and his partner Rudolph Ising also produced a long animated work for Van de Camp Foods in their Los Angeles studio.

Some of the animated films made in the 1950s now seem unintentionally funny, like the animated turtle that tells us to "duck and cover" in case of an atomic blast, or the atomic man in John Sutherland's A is for Atom. John Sutherland Productions was formed in Los Angeles in 1945 and produced a great number of propaganda/informational films over the years.

Among the best educational films were a science series sponsored by Bell Labs. They hired Frank Capra to produce them and Dr. Frank Baxter was the host. Our Mr. Sun (1955) featured animation directed by Bill Hurtz at UPA. Shamus Culhane (NYC) provided animated sequences for three Bell Labs films: Hemo the Magnificent (1956), The Strange Case of Cosmic Rays (1957) and The Unchained Goddess (1958).