The company Ballets Russes de Monte-Carlo (with a plural name) was formed in 1932 after the death of Sergei Diaghilev and the demise of Ballets Russes. Its director was Wassily de Basil (usually referred to as Colonel W. de Basil), and its artistic director was René Blum. They fell out in 1936 and the company split. The part which de Basil retained went through two name changes before becoming the Original Ballet Russe. Blum founded Les Ballets de Monte Carlo, which changed its name to Ballet Russe de Monte Carlo (note the singular) when Léonide Massine became artistic director in 1938. It operated under this name until it disbanded some 20 years later.

The Ballet Russe de Monte Carlo featured such dancers as Ruthanna Boris, Frederic Franklin, Alexandra Danilova, Maria Tallchief, Nicholas Magallanes, Lois Bewley, Tamara Toumanova, George Zoritch, Alicia Alonso, Harriet Toby, Elissa Minet, Yvonne Joyce Craig, Nina Novak, Raven Wilkinson, Meredith Baylis, Cyd Charisse, Marc Platt, Nathalie Krassovska, Irina Baronova, Leon Danielian, Anna Istomina, and Anna Adrianova. The company's resident choreographer was Massine; it also featured the choreography of Michel Fokine, Bronislava Nijinska, Frederick Ashton, George Balanchine, Agnes de Mille, Ruth Page and Valerie Bettis. Their costumes in the first season were made by Karinska, and were designed by Christian Bérard, André Derain, and Joan Miró.

The Ballet Russe de Monte Carlo toured chiefly in the United States and Canada after World War II began. The company introduced audiences to ballet in cities and towns across the country, in many places where people had never seen classical dance. The company's principal dancers performed with other companies, and founded dance schools and companies of their own across the United States and Europe. They taught the Russian ballet traditions to generations of Americans and Europeans.

Ballet Russe de Monte Carlo initially began because Léonide Massine, the choreographer of Colonel Wassily de Basil's Ballets Russes, desired to be more than just Colonel Wassily de Basil's right-hand man. De Basil was the artistic director of his Ballet Russes, and Massine desired that position, so he broke off to start his own company.

Blum and de Basil fell out in 1934, and their Ballets Russes partnership dissolved. After working desperately to keep ballet alive in Monte Carlo, in 1937 Blum and former Ballets Russes choreographer Léonide Massine acquired financing from Julius Fleischmann Jr.'s World Art, Inc. to create a new ballet company.

At the start of Blum and Massine's company, Massine ran into trouble with Col. de Basil: the ballets which Massine choreographed while under contract with Col. de Basil were owned by his company. Massine sued Col. de Basil in London to regain the intellectual property rights to his own works. He also sued to claim the Ballet Russe de Monte Carlo name. The jury decided that Col. de Basil owned Massine's ballets created between 1932 and 1937, but not those created before 1932. It also ruled that both successor companies could use the name Ballet Russe — but only Massine & Blum's company could be called Ballet Russe de Monte-Carlo. Col. de Basil finally settled on the Original Ballet Russe.

The new Ballet Russe de Monte Carlo gave its first performance in 1938. Costumes were designed by British dancers Frederic Franklin and Jo Savino were also among those who joined the new company. Franklin danced with the company from 1938 to 1952, assuming the role of ballet master in 1944. With the company, Franklin and Alexandra Danilova created one of the legendary ballet partnerships of the twentieth century.

Sol Hurok, manager of de Basil's company since 1934, ended up managing Blum's company as well. He hoped to reunite the two ballet companies, but he was unsuccessful.