Following Orville and Wilbur Wright's first successful flight in 1903 in North Carolina, Los Angeles was smitten by aviation fever. (To be fair, John Joseph Montgomery of Santa Clara College had already demonstrated a rudimentary glider in 1883, two decades before the first flight of the Wright brothers). Most Los Angelenos had never seen a flying machine until January 1910 when the city staged an eleven-day international air show called "Aviation Meet", co-sponsored by William Randolph Hearst and Henry Huntington. In October, Hearst offered a large prize to the aviator who could make the first transcontinental flight. Almost one year later Calbraith Rodgers succeeded, starting from near York and landing in Pasadena 49 days and some 70 stops later (he didn't get the prize because of a caveat that the journey be completed in less than 30 days). It even helped that Rodgers died in a plane accident over Long Beach a few months later. The air show and the transcontinental flight triggered enthusiasm in the region and dozens of amateur aviators started flying and building airplanes.

Allan and Malcom Loughead funded the Alco Hydro-Aeroplane Company in San Francisco in 1912 and during the Panama-Pacific Exposition offered flights to the crowd. In 1916 they relocated to southern California and opened a new company, the Loughead Aircraft Manufacturing Company. In 1926 Allan Loughead partnered with Jack Northrop and renamed it Lockheed. Meanwhile, in 1921 Donald Douglas founded an aircraft-building company in Los Angeles to commercialize his "Cloudster", the first airplane to lift a load exceeding its own weight, and in 1925 Claude Ryan founded a company in San Diego to build the Ryan M1 (Charles Lindbergh's "Spirit of St Luis" that flew from New York to Paris in 1927 was a Ryan plane). Both Douglas and Lockheed soon came to rely on lucrative contracts from the military (e.g., the World Cruisers of 1924, the T2D-1 torpedo bomber of 1927, the flying boat Sinbad of 1930).

Using a donation by philanthropist Daniel Guggenheim, the California Institute of Technology (formerly Throop Polytechnic Institute) opened the Guggenheim Aeronautical Laboratory (GALCIT) in 1928. The lab featured a state-of-the-art wind tunnel and teachers such as Harry Bateman (a British mathematician), Todor Karman (a Hungarian physicist) and Douglas' chief engineer Arthur Raymond. This group pioneered the collaboration among university research, industrial labs and government agencies that would become common in the Bay Area. That collaboration changed a world that was still dominated by railroads.

Meanwhile an important decision was taken by the government. The Post Office had launched air mail in 1918 using old British planes built by Geoffrey de Havilland at the Aircraft Manufacturing Company (Airco), then the largest aircraft manufacturer in the world. Transcontinental air mail had begun in 1924 but the complexity of manning the equipment required for safe long-distance air travel had prompted the government to subcontract mail delivery to commercial airlines. A scandal led in 1934 to a law ordering the dissolution of holding companies mixing airlines and aircraft manufacturers, thus boosting competition in the field.

One year after its DC-1 had set a new record for coast-to-coast flight (11 hours from Los Angeles to New York in april 1935), Douglas struck gold with the 21-passenger DC-3 (first delivered to American Airlines in june 1936) that did for air travel what the Ford Model T did for car travel.

Its transcontinental record, meanwhile, was beaten repeatedly by Howard Hughes' H-1 Racer planes, down to 7 hours in 1937. By 1939 Southern California was home to most of the aircraft industry of the USA and Douglas airplanes were carrying more than 90% of civilian air passengers.

Meanwhile at GALCIT the self-taught Jack Parsons experimented with solid-fuel rockets (the JATO of 1942), Karman's student Frank Malina with liquid fuel (the WAC Corporal of 1945, built jointly by Douglas and GALCIT), and the Chinese-born Qian Xuesen, aka Hsue-shen Tsien, even speculated about nuclear-powered rockets. In 1942 these university researchers (Karman, Malina, Parsons) founded a company, Aerojet Engineering, thus pioneering the model of the start-up. In 1944 Karman, Parsons and Malina founded the Jet Propulsion Laboratory (JPL) to work on rockets, ostensibly a joint project between the army and the university, and in 1945 Karman was drafted by the military to start Project RAND at Douglas, the prototype of the "think tank", later turned into the self-standing RAND Corporation (1948). Malina was a kinetic artist who in 1968 founded the magazine Leonardo devoted to artists-scientists. Parsons was an occult sex magician, member of Aleister Crowley's esoteric cult, and died in a mysterious explosion in 1952.

World War II made the fortune of several other aircraft builders: Northrop, who founded his own company in 1939 in Los Angeles, Jim McDonnell, who established his firm in St Louis (Missouri) also in 1939, and, of course, Boeing (founded in 1916 in Seattle by William Boeing, that reached its wartime apogee with the B-29 of 1944, the first intercontinental bomber). In the Los Angeles area the other big ones (besides Douglas, Lockheed and Northrop) were Vultee (originally founded by Jerry Vultee and Vance Breese as the Airplane Development Corporation in 1932 to sell six-passenger V-1 passenger planes to American Airlines) and Dutch Kindelberger's North American Aviation, another huge beneficiary of military contracts.

Lockheed became a darling of the Air Force when its Lockheed Advanced Development Projects (LADP), aka "Skunk Works", located on the northern side of the San Gabriel mountains, established in late 1943 under Kelly Johnson, designed the first jet fighter of the USA, the P-80 Shooting Star, later followed by other strategic projects like the spy plane U-2 (1957) and the F-104 Starfighter (1958). By 1943 the industry had already built 100,000 warplanes. By the end of the war industrial production in the Los Angeles area was second only to the Detroit area. Uniquely in history, Los Angeles had been industrialized in a brief period of time (the war) and largely by government intervention, creating a third massive industrial region (after the Northeast and the Midwest). In other words, World War II had the side effect of revolutionizing the economy of California and of integrating California with the national industrial complex.

The history of aviation in the Los Angeles area well illustrates how California developed via the interaction between defense spending, university research and industrial business. Aviation was the first high-tech industry to spread globally from California.