Scottish businessman Norman Loudon purchased Littleton Park in 1931 for use in his new film company, Sound Film Producing & Recording Studios, which opened in 1932. The studio, which produced both shorts and features, was quickly successful and rapidly expanded. Proximity to Vickers-Armstrong aircraft factory, which drew German bombers, disrupted filming in World War II, as did the requisitioning of the studio in 1941 by the Ministry of Defence, who first used it for sugar storage and later to create decoy aircraft and munitions for positioning in the Middle East.

After reopening in 1945, the studio changed hands when Sir Alexander Korda purchased a controlling interest in Sound City and Shepperton Studios. Among the notable films produced at the studio during this period was 1949's The Third Man, which was not only critically acclaimed at the time, but was selected in 1999 by the British Film Institute as the best British film of the 20th century.

In spite of such successes the studio ran into financial difficulties in the 1950s when it went into receivership and in 1955, a new company, British Lion Films took control. Helming Shepperton Studios then were Roy and John Boulting. The studio produced their comedies, like I'm All Right Jack, as well as other features like J. Lee Thompson's The Guns of Navarone and Steve Sekely's The Day of the Triffids. In spite of financial ups and downs at British Lion, the studio remained active until the early 1970s. In 1969, the studio made 27 films. By 1971, that number had diminished to seven. Production varied through the 1970s to reach a low in 1979 of two.

Among the issues faced by Shepperton during that time was the desire of British Lion to sell Shepperton to housing developers. Films made during this turbulent time include Richard Attenborough's Young Winston and Fred Zinnemann's The Day of the Jackal. The British film industry proposed a compromise, and in 1973 the studio was reduced from 60 acres to 20. In 1975, the studio changed hands and in spite of low production schedules was a filming site of some notable features, including Richard Donner's The Omen, Franklin Schaffner's The Boys from Brazil, Ridley Scott's Alien, David Lynch's The Elephant Man and Attenborough's Gandhi.

In 1984, the studio changed hands again, coming under the control of brothers John and Benny Lee, who renovated the studio but they soon had to handover financial control to bankers Warburg-Pincus. Shepperton became busy in filming television shows as well as such films as Franco Zeffirelli’s Hamlet, Kevin Reynolds' Robin Hood: Prince of Thieves and Nicholas Hytner's The Madness of King George. In 1995, the studio was purchased by a consortium headed by Ridley (Alien, Blade Runner and Gladiator) and Tony Scott (Top Gun, Beverly Hills Cop II and Enemy of the State), which extensively renovated the studios while also expanding and improving its grounds. In 2001, Shepperton merged with Pinewood Studios, forming the Pinewood Group (which later expanded to include Teddington Studios).