Industrial Light & Magic Industrial Light & Magic , or ILM , is the visual effects company responsible for much of the visual effects in the " Star Wars " films . It was founded by George Lucas in 1975 , as part of Lucasfilm Limited . ILM have also been responsible for the effects on over 200 other films , including " " , the " " trilogy , the " " films , the " " franchise , the 2009 film " " , and the 2011 film " " . Creation . After George Lucas made the hit movie " " , he worked on a space opera he called " The Star Wars " , which was then purchased by 20th Century Fox . Lucas intended to create special effects that had never been done before . However , Fox ' s in - house special effects department had been shut down because of costs and the publics interest in more realistic looking films . Lucas then decided to create his own effects company . His first choice was Douglas Trumbull , responsible for the photographical effects in " 2001 : A Space Odyssey " . As Trumbull was doing Steven Spielberg ' s " Close Encounters of the Third Kind " , he instead recommended Lucas his assistant , John Dykstra . Dykstra then assembled a crew of 75 college students , artists and engineers . Gary Kurtz bough to crew to work on a warehouse in Van Nuys , California . Looking for a name that would disguise the warehouse ' s function and suggest it was simply in the business of wholesaling electronic components rather than making movies , Lucas came up with Industrial Light and Magic . In July of 1975 , the company was born . " Star Wars " work . ILM ' s first film was " " ( called " The Star Wars " at first ) . Many at the recently founded company ( then jokingly nicknamed " The Country Club " ) were not sure the new groundbreaking special effects would ever work . The working environment was chaotic and unorthodox : when Fox executives visited the crew to see their progress , one of the employees was wearing a fish - head mask , the artists used an improvised slide to plunge into a swimming pool built in a container , and Dykstra threw a refrigerator from the warehouse ' s roof " because we wanted to know how it would sound . " The artists spent their days smoking marijuana and trying to find relief from the hot environment in bathtubs . Most of the $ 1 million Lucas lent to the company was spent on equipment , such as miniatures and the motion control camera — a technology later crucial for scenes such as the Battle of Yavin . When Lucas returned to California after ending principal photography , ILM was in worse shape than ever before . Except for the escape pod being released from " Tantive IV " , Lucas found all the completed effects to be unsalvageable . Adding this to the troublesome shooting , most doubted " Star Wars " would ever reach theaters , and Fox nearly terminated production . Lucas decided to take direct control of the company , supervising the effects work daily . The battle scenes were mostly directly copied from dogfights taken from World War II movies such as " Tora ! Tora ! Tora ! " which Lucas used as reference . Lucas also brought in some third parties to complete effects , such as Dan O ' Bannon , Rick Baker and Phil Tippett . Once the film was completed , most of the crew at ILM decided to stay , but Dykstra brought some of the artists to form his own company , called Apogee . Trivia . Although ILM primarily worked on " Star Wars " projects , they also had a hand in some " Star Trek " projects , including " Star Trek II : Wrath of Khan " . Mark Hamill , upon discovering this during production of " Return of the Jedi " , jokingly referred to them as traitors , with Lucas stating that it was a business . In 2010 , ILM allowed the show " " to film at their complex . They set up a challenge for the contestants on the show , which involved the characters of Ponds , Cody , and Padmé Amidala from " " .