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Malayalam cinema boasts many brilliant film directors, starting with J. C. Daniel, the director and producer of the first Malayalam film, Vigathakumaran (1928). Unlike other Indian films at that time, most of which were films based on the puranas, he chose to base his film on a social theme.[17] Though the film failed commercially, he paved way for the Malayalam film industry and is widely considered the father of Malayalam cinema. Till the 1950s, Malayalam film didn't see many talented film directors. The milestone film Neelakkuyil (1954), directed by Ramu Karyat and P. Bhaskaran, shed a lot of limelight over its directors.[12] Ramu Karyat went on to become a celebrated director in the 1960s and 1970s. P. Bhaskaran also directed a few acclaimed films in the 1960s. The cameraman of Neelakkuyil, A. Vincent, also became a noted director of the 1960s and 1970s.[18] Another noted director of the 1950s was P. Ramadas, the director of the neorealistic film Newspaper Boy (1955).

In the 1970s, the Malayalam film industry saw the rise of film societies. It triggered a new genre of films known as "parallel cinema". The main driving forces of the movement, who gave priority to serious cinema, were Adoor Gopalakrishnan and G. Aravindan. People like John Abraham and P. A. Backer gave a new dimension to Malayalam cinema through their political themes. The later 1970s witnessed the emergence of another stream of Malayalam films, known as "middle-stream cinema", which seamlessly integrated the seriousness of the parallel cinema and the popularity of the mainstream cinema. Most of the films belonging to this stream were directed by I. V. Sasi, P. G. Viswambharan, K. G. George, Bharathan and Padmarajan.

In the late 1980s and early 1990s, a period widely regarded as the Golden Age of Malayalam cinema, a new array of directors joined the stalwarts who had already made a mark in the industry. The Golden Age saw the narrowing of the gap between the different streams of the industry.[12] Directors like K. G. George, Priyadarshan, I. V. Sasi, John Abraham, Fazil, Joshy, Bhadran, P. G. Viswambharan, Kamal, Sibi Malayil, Hariharan, Sathyan Anthikkad, K. Madhu and Siddique-Lal contributed heavily in the Golden Age. Then there were extraordinary screenwriters like M. T. Vasudevan Nair, T. Damodaran, A. K. Lohithadas and Sreenivasan who contributed their part as well.[citation needed]

The 2000s witnessed the decline of quality of Malayalam films. Many directors who excelled in the Golden Age struggled as many of their films continuously failed critically and commercially. As a result the gap between parallel cinema (now known as art cinema) and mainstream cinema (now known as commercial cinema) widened. The 2000s also saw a commercial film formula being created in line with Tamil and Bollywood films. Directors like Shaji Kailas, Rafi Mecartin and Anwar Rasheed directed blockbusters which had few artistic merits to boast of. Despite the overall decline, some directors stood apart and made quality cinema. Shaji N. Karun, Lenin Rajendran, Shyama Prasad and Jayaraj made films that won laurels. Notable directors who debuted in this time include Blessy, Lal Jose, R. Sharath, Renjith, Roshan Andrews, Amal Neerad, Aashiq Abu, Vineeth Sreenivasan and Lijo Jose Pellissery.[citation needed]

Malayalam film directors have made their mark in the national level as well. Out of the 40 National Film Awards for Best Director given away till 2007, Malayalam directors have pocketed 12, trailed only by Bengali (14 awards). The directors who have won the prestigious award are Adoor Gopalakrishnan (1973, 1985, 1988, 1990, 2007), G. Aravindan (1978, 1979, 1987), Shaji N. Karun (1989), T.V. Chandran (1994), Jayaraj (1998) and Rajivnath (1999). There are several recipients of the Special Jury Award as well: Mankada Ravi Varma (1984), John Abraham (1987), Shaji N. Karun (1995) and Pradeep Nair (2005).

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