Satellite Records (renamed to 'Stax' in 1961) was founded in 1959 by Jim Stewart and Estelle Axton. Early artists recorded by Stax included Rufus and Carla Thomas and the Mar-Keys (formerly known as the Royal Spades).

Soon after, pianist Booker T. Jones joined the label and, along with members of the Mar-Keys, began performing as Booker T. and the Memphis Group (MGs). This band's sound exemplified the style that Stax was looking for.

In 1962, Stax created a subsidiary label, Volt Records, used for R&B music. The first artist released by Volt was Otis Redding, their most successful artist. Another hit-making act was Sam and Dave, sent to Stax by Atlantic.

In 1968, contract renegotiations fell through with Atlantic and Stewart sold the label to Gulf and Western. Although Stax had lost their most valuable artists - Sam and Dave, who were signed to Atlantic, and Otis Redding, who had died shortly before the move between companies - they recovered quickly, building on such new artists as Isaac Hayes.

However, Stax's record sales were down overall under Gulf and Western's management and in 1970 Stewart purchased the label back. Stax subsisted on its own for a short period until 1972, when negotiations with Columbia Records began. A deal was struck with Columbia, but Stax's profits were cut severely and it eventually went bankrupt in 1976.

Fantasy Records bought the post-Atlantic (post-May 1968) Stax recordings and continued to repackage and rerelease the Stax catalogue. Atlantic still has the rights to the Atlantic-era Stax recordings released up to May 1968, most of which have been reissued by co-owned Rhino Records or licensed to Collectables Records. Fantasy does have the rights to Atlantic-era Stax recordings which were not released by Atlantic Records.

Stax, along with the rest of the Fantasy label group, is now owned by Concord Records.