Chanel became a licensed modiste (hat maker) in 1910 and opened a boutique at 21 rue Cambon, Paris named Chanel Modes. Chanel's modiste career bloomed once theatre actress Gabrielle Dorziat modelled her hats in the F Noziere's play Bel Ami in 1912 (Subsequently, Dorziat modelled her hats again in Les Modes). In 1913, she established a boutique in Deauville, where she introduced luxe casual clothes that were suitable for leisure and sport. Chanel launched her career as fashion designer when she opened her next boutique, titled Chanel-Biarritz, in 1915, catering to the wealthy Spanish clientele who holidayed in Biarritz and were less affected by the war. Fashionable like Deauville, Chanel created loose casual clothes made out of jersey, a material typically used for men's underwear. By 1919, Chanel was registered as a couturiere and established her maison de couture at 31 rue Cambon.

Coco Chanel, 1920.

　　In 1920, she was introduced by ballet impresario Sergei Diaghilev to Igor Stravinsky. Now a notable patron of the arts, Chanel guaranteed the production of the ballet Le Sacre du Printemps (“The Rite of Spring”) against financial loss, and provided her new home Bel Respiro, located in a Paris suburb, as a residence for composer Stravinsky and his family. In addition to turning out her couture collections, Chanel threw her prodigious energies into designing dance costumes for the cutting-edge Ballet Russe. Between the years 1923-1937, she collaborated on productions choreographed by Diaghilev and dancer Vaslav Nijinsky, notably Le Train bleu, a dance-opera, Orphée and Oedipe Roi.

　　In 1924, Chanel made an agreement with the Wertheimer brothers, Pierre and Paul, directors of the eminent perfume house Bourgeois since 1917, creating a corporate entity, "Parfums Chanel." The Wertheimers agreed to provide full financing for production, marketing and distribution of Chanel No. 5. For ten percent of the stock, Chanel licensed her name to "Parfums Chanel" and removed herself from involvement in all business operations. Displeased with the arrangement, Chanel worked for more than twenty years to gain full control of "Parfums Chanel." She proclaimed that Pierre Wertheimer was “the bandit who screwed me.”

　　One of Chanel’s longest and enduring associations was with Misia Sert, a notorious member of the Parisian, bohemian elite and wife of Spanish painter José-Maria Sert. It is said that theirs was an immediate bond of like souls, and Misia was attracted to Chanel by “her genius, lethal wit, sarcasm and maniacal destructiveness, which intrigued and appalled everyone.” Both women, convent bred, maintained a friendship of shared interests, confidences and drug use. By 1935, Chanel had become a habitual drug user, injecting herself with morphine on a daily basis until the end of her life. According to Chandler Burr's The Emperor of Scent, Luca Turin related an apocryphal story in circulation that Chanel was "called Coco because she threw the most fabulous cocaine parties in Paris"

Perfume Chanel No.5

　　In 1923, Vera Bate Lombardi, born Sarah Gertrude Arkwright, reputedly the illegitimate daughter of the Marquess of Cambridge, afforded Chanel entry into the highest levels of British aristocracy. It was an elite group of associations revolving around such personages as Winston Churchill, aristocrats such as the Duke of Westminster and royals such as Edward, Prince of Wales. It was in Monte Carlo in 1923, at age forty-two that Chanel was introduced by Lombardi to the vastly wealthy Duke of Westminster, Hugh Richard Arthur Grosvenor, known to his intimates as “Bendor”. The Duke of Westminster lavished Chanel with extravagant jewels, costly art, and a home in Mayfair. In 1929, he gifted her with a parcel of land he had purchased near Monte Carlo where Chanel built an opulent villa, La Pausa His affair with Chanel lasted ten years. The Duke, an outspoken anti-Semite, intensified Chanel’s inherent antipathy toward Jews and shared with him an expressed homophobia.

　　It was in 1931 while in Monte Carlo that Chanel made the acquaintance of Samuel Goldwyn. The introduction was made through a mutual friend, the Grand Duke Dmitri Pavlovich, cousin to the last czar of Russia, Nicolas II. Goldwyn offered Chanel a tantalizing proposition. For the sum of a million dollars (approximately seventy-five million today), he would bring her to Hollywood twice a year to design costumes for MGM stars. Chanel accepted the offer. En route to California from New York traveling in a white train car, which had been luxuriously outfitted specifically for her use, she was interviewed by Colliers magazine in 1932. Chanel said she had agreed to the arrangement to "see what the pictures have to offer me and what I have to offer the pictures." This enterprise with the film industry left Chanel with a dislike for the business of movie making and distaste for the Hollywood culture itself, which she denounced as “infantile.” Chanel's verdict was that: "Hollywood is the capital of bad taste...and it is vulgar." Ultimately, her design aesthetic did not translate well to film, failing to satisfy the standard of Hollywood glamour of the era. On screen her creations did not transmit enough dazzle and sexy allure. Her designs for film stars were not acclaimed and generated little comment. Despite her failure in Hollywood, Chanel went on to design the costumes for several French films, including Jean Renoir's 1939 film La Règle du jeu where she was credited as La Maison Chanel.

　　Chanel was the mistress of some of the most influential men of her time, but she never married. She had affairs with the poet Pierre Reverdy, and illustrator and designer, Paul Iribe. After her romance with Reverdy ended in 1926, they still maintained a friendship which lasted some forty years. Her involvement with Iribe was a deep one until his sudden death in 1935. Iribe and Chanel shared the same reactionary politics, Chanel financing Iribe's monthly, ultra-nationalist newsletter, Le Témoin, which fueled an irrational fear of foreigners and preached anti-Semitism.

　　Chanel was well aware that her lineage from peasant stock would forever prohibit her marriage into aristocratic circles. When asked why she did not marry the The Duke of Westminster, she stated: "There have been several Duchesses of Westminster. There is only one Chanel."

　　Chanel was, "the first [designer] to show black dresses to be worn at any time."

　　As the 1930s progressed, Chanel’s place on the throne of haute couture came under threat. The boyish look and the short skirts of the 1920s flapper seemed to disappear overnight. Chanel’s designs for film stars in Hollywood had met with failure, and had not aggrandized her reputation as expected. More significantly, Chanel’s star had been eclipsed by her premier rival, the designer, Elsa Schiaparelli. Schiaparelli’s innovative design, replete with playful references to Surrealism was creating much enthusiasm and excitement in the fashion world. Feeling she was losing her avant-garde edge, Chanel proceeded to collaborate with Jean Cocteau on his theatre piece, Oedipe Rex. The costumes she designed were mocked and critically lambasted: “Wrapped in bandages the actors looked like ambulant mummies or victims of some terrible accident.”