structural:reformatting, quality:corruption
1946–1952: MGM

After Kelly returned from Naval service, MGM had nothing planned and used him in a routine black-and-white movie: Living in a Big Way (1947). The film was considered so weak that the studio asked Kelly to design and insert a series of dance routines; they noticed his ability to carry out such assignments. This led to a lead part in his next picture, with Judy Garland and director Vincente Minnelli —a musical film version of S.N. Behrman 's play, The Pirate (1948), with songs by Cole Porter. The Pirate gave full rein to Kelly's athleticism. It features Kelly's work with the Nicholas Brothers —the leading black dancers of their day—in a virtuoso dance routine. Now regarded as a classic, the film was ahead of its time, but flopped at the box office.

MGM wanted Kelly to return to safer and more commercial vehicles, but he ceaselessly fought for an opportunity to direct his own musical film. In the interim, he capitalized on his swashbuckling image as d'Artagnan in The Three Musketeers (also 1948)—and also appeared with Vera-Ellen in the Slaughter on Tenth Avenue ballet in Words and Music (1948 again). He was due to play the male lead opposite Garland in Easter Parade (1948), but broke his ankle playing volleyball. He withdrew from the film and persuaded Fred Astaire to come out of retirement to replace him. There followed Take Me Out to the Ball Game (1949), his second film with Sinatra, where Kelly paid tribute to his Irish heritage in "The Hat My Father Wore on St. Patrick's Day" routine. This musical film persuaded Arthur Freed to have Kelly make On the Town (also 1949), in which he partnered with Frank Sinatra for the third and final time. A breakthrough in the musical film genre, it has been described as "the most inventive and effervescent musical thus far produced in Hollywood."

Stanley Donen, brought to Hollywood by Kelly to be his assistant choreographer, received co-director credit for On the Town. According to Kelly: "when you are involved in doing choreography for film, you must have expert assistants. I needed one to watch my performance, and one to work with the cameraman on the timing... without such people as Stanley, Carol Haney, and Jeanne Coyne I could never have done these things. When we came to do On the Town, I knew it was time for Stanley to get screen credit because we weren't boss–assistant anymore but co-creators." Together, they opened up the musical form, taking the film musical out of the studio and into real locations, with Donen taking responsibility for the staging and Kelly handling the choreography. Kelly went much further than before in introducing modern ballet into his dance sequences, going so far in the "Day in New York" routine as to substitute four leading ballet specialists for Sinatra, Munshin, Garrett, and Miller.

Kelly asked the studio for a straight acting role, and he took the lead role in the early the Mafia melodrama Black Hand (1950). This exposé of organized crime is set in New York's " Little Italy " during the late 19th century and focuses on the Black Hand, a group that extorts money upon threat of death. In the real-life incidents upon which this film is based, it was the Mafia, not the Black Hand, who functioned as the villain. Filmmakers had to tread gingerly whenever dealing with big-time crime, it being safer to go after a "dead" criminal organization than a "live" one. There followed Summer Stock (1950)—Garland's last musical film for MGM—in which Kelly performed the "You, You Wonderful You" solo routine with a newspaper and a squeaky floorboard. In his book Easy the Hard Way, Joe Pasternak, head of another of MGM's musical units, singled out Kelly for his patience and willingness to spend as much time as necessary to enable the ailing Garland to complete her part.

Then followed in quick succession two musicals that secured Kelly's reputation as a major figure in the American musical film. First, An American in Paris (1951) and—probably the most admired of all film musicals— Singin' in the Rain (1952). As co-director, lead star, and choreographer, Kelly was the driving force in both of these films. Johnny Green, the head of music at MGM at the time, said of him,

Gene is easygoing as long as you know exactly what you are doing when you're working with him. He's a hard taskmaster and he loves hard work. If you want to play on his team you'd better like hard work, too. He isn't cruel, but he is tough, and if Gene believed in something, he didn't care who he was talking to, whether it was Louis B. Mayer or the gatekeeper. He wasn't awed by anybody, and he had a good record of getting what he wanted.

An American in Paris won six Academy Awards, including Best Picture. The film also marked the debut of 19-year-old ballerina Leslie Caron, whom Kelly had spotted in Paris and brought to Hollywood. Its dream ballet sequence, lasting an unprecedented 17 minutes, was the most expensive production number ever filmed at that time. Bosley Crowther described it as, "whoop-de-doo... one of the finest ever put on the screen." Also in 1951, Kelly received an honorary Academy Award for his contribution to film musicals and the art of choreography.

The following year, Singin' in the Rain featured Kelly's celebrated and much imitated solo dance routine to the title song, along with the "Moses Supposes" routine with Donald O'Connor and the "Broadway Melody" finale with Cyd Charisse. Though the film did not initially generate the same enthusiasm An American in Paris created, it has subsequently overtaken the earlier film to occupy its current pre-eminent place in the esteem of critics.