Malayalam cinema has had a significant impact on Indian cinema as a whole. The industry's focus on realistic storytelling, nuanced character development, and socially relevant themes has influenced filmmakers across India. , in particular, has drawn inspiration from Malayalam films, with remakes and adaptations becoming increasingly common.

The industry began with the silent film Vigathakumaran (1928) by J.C. Daniel, followed by the first talkie, Balan (1938). These early works were instrumental in consolidating a modern Malayali linguistic identity.

What truly separates Malayalam cinema is its treatment of the "ordinary." A patriarch sitting on the charupadi (veranda) reading the morning newspaper, the middle-class struggles of a government employee, the nuanced dynamics between a mother-in-law and daughter-in-law—Malayalam cinema finds profound drama in the mundane.

Cinema has been a primary medium for exploring Kerala's complex socio-political landscape.

The most enduring characteristic of Malayalam cinema is its "literary depth." Unlike industries focused on escapism, Kerala's high literacy rate fostered an audience that demanded nuance and social relevance.