Walter Chrysler had originally arrived at the ailing Maxwell-Chalmers company in the early 1920s, having been hired to take over and overhaul the company's troubled operations (just after having done a similar rescue job at the Willys car company).

In late 1923 production of the Chalmers automobile was ended. Then in January of 1924 Walter Chrysler launched the well-received Chrysler automobile. The Chrysler was a 6-cylinder automobile, designed to provide customers with an advanced, well-engineered car, but at a more affordable price than they might expect. (Elements of this car are traceable back to a prototype which was under development at Willys at the time that Chrysler was there). The Maxwell automobile was eventually dropped after its 1925 model year run, although in truth the new line of lower-priced 4-cylinder Chryslers which were then introduced for 1926 were basically Maxwells that had been re-engineered and rebranded. It was during this period that Walter Chrysler would assume presidency of the company, with the company ultimately incorporated under the Chrysler name.

Creation of the Plymouth brand

In 1928 the Chrysler Corporation founded the Plymouth brand at the low priced end of the market (essentially by once again re-engineering and rebranding the 4-cylinder models), and it also introduced the DeSoto brand in the medium price field. Subsequently, Chrysler acquired the Dodge Brothers automobile company; all of this was in order to set up a full range of brands similar to that of the General Motors corporation. This process reached its logical conclusion in 1955, when the Imperial was made a brand of its own and Chrysler marketed a GM-like five-brand lineup. Well before then, though, Chrysler Corporation had become noted both for its engineering features as well as its periodic financial crises. By the end of the 1930s, the DeSoto and Dodge divisions would flip-flop spots in the corporate pecking order making the lineup Plymouth, Dodge, DeSoto, Chrysler, and Imperial.

Chrysler Airflow

In 1934, the company introduced the Chrysler Airflow, featuring an advanced streamlined body which was among the first to be designed according to scientific aerodynamic principles. Chrysler also created the industry's first wind tunnel to develop them. Unfortunately, it was not well accepted by the public, and it was the humble Dodge and Plymouth divisions, which had not been given an Airflow model, which pulled the firm through the Depression years with its conventional but quite popular bodystyles. Plymouth was one of only a few marques that actually increased sales during the cash-strapped thirties. It was during this decade that the company created a formal parts division under the Mopar (Motor Parts) brand, with the result that Chrysler products are still often called Mopars.

The unsuccessful Airflow had a chilling effect on Chrysler styling and marketing, which remained determinedly unadventurous through the 1940s and into the 1950s, with the single exception of the installation of hidden headlights on the very brief production run of the 1942 DeSotos. Engineering advances continued however, and in 1951 the firm introduced the first of a long and famous series of Hemi V8s. In 1955, things brightened after the stodgy post-war styling with the introduction of Virgil Exner's successful Forward Look designs. With the inauguration of the second generation Forward Look cars for 1957, "Torsion-Aire" was introduced. This was not air suspension, but an indirect-acting, torsion-spring front suspension system which drastically reduced unsprung weight and shifted the car's center of gravity downward and rearward, resulting in both a smoother ride and significantly improved handling. However, a rush to production of the 1957 models led to quality-control problems (mostly related to body fit and finish, resulting in major rusting). This, coupled with a national recession, found the company again in recovery mode.

1960s

In 1960, Chrysler introduced unibody (unitized body) construction, thus making the company first of the Big Three to offer it. Unibody was standard in all Chrysler products except the Imperial. This gave the body more rigidity and less rattles, and would soon become an industry standard. Its new compact line, the Valiant, opened strong and continued to gain market share for well over a decade. Valiant was introduced as a division of its own but would become adopted by Plymouth in 1961. Alternators would replace electrical generators in the 1960 Valiant and then all of the 1961 models as standard equipment, an industry first. The DeSoto marque was axed after the introduction of the 1961 models due in part to the broad array of the Dodge lines and the general neglect of the division. The same affliction plagued Plymouth as it also suffered when Dodge crept into Plymouth's price range. (This would eventually lead to the demise of Plymouth several decades down the road.) An ill-advised downsizing of the full-size Dodge and Plymouth lines in 1962 hurt sales and profitability for several years.

In April 1964, the Plymouth Barracuda, which was a Valiant sub-series, was introduced. The huge glass rear window gave the impression of a hatchback with its "love-it-or-hate-it" styling. Beating the Ford Mustang to the market by almost two weeks, it could be argued that the Barracuda was really the first pony car. However, unlike the Mustang, it did not rob sales of other division's models. In spite of better build quality than the Mustang, the Mustang still outsold the Barracuda 10-to-1 between April 1964 and August 1965.

Expansion into Europe

In 1966, Chrysler expanded into Europe, by taking over the British Rootes Group, Simca of France and Barreiros of Spain, to form Chrysler Europe. The former purchase turned out to be a major mistake for the company due to the major industrial relations problem which afflicted the British motor industry at the time. In addition, Rootes had archaic factories and an outdated product range. Chrysler retired all of the Rootes marques in favor of the Chrysler name. The Simca and Barreiros divisions were more successful, but in the end the various problems were overwhelming and the firm gained little from these ventures. Chrysler sold in 1978 these assets to PSA Peugeot Citroën, which in turn sold quickly the British and Spanish truck production lines to Renault of France .

More successfully, at this same time the company helped create the muscle car market in the U.S., first by producing a street version of its Hemi racing engine and then by introducing a legendary string of affordable but high-performance vehicles such as the Plymouth GTX, Plymouth Road Runner, and Dodge Charger. The racing success of several of these models on the NASCAR circuit burnished the company's reputation for engineering.

The 1970s brought both success and crisis. The aging but stalwart compacts saw a rush of sales as demand for smaller cars crested after the first gas crisis of 1973. However, an expensive investment in an all-new full-size lineup went largely to waste as the new 1974 vehicles appeared almost precisely as gasoline prices reached a peak and large-car sales collapsed. 1974 would also mark the end of the Barracuda (and the similar Dodge Challenger) after the redesigned ponycars introduced for 1970 had failed to attract buyers in the shrinking market segment. At mid-decade, the company scored a conspicuous success with its first entry in the personal luxury car market, the Chrysler Cordoba. However, the introduction of the Dodge Aspen/Plymouth Volare twins in 1976 did not repeat the success of the discontinued Valiant/Dodge Dart line, and the company had delayed in producing a domestic entry in the now important subcompact market.