Gygax co-founded TSR with Don Kaye to publish and market Dungeons & Dragons. The company's initial success was fueled by the growing popularity of the game.

Dungeons & Dragons experienced a massive surge in popularity, becoming a cultural phenomenon. TSR grew rapidly, expanding its product line and employing a large staff.

Gygax spearheaded the creation of Advanced Dungeons & Dragons (AD&D), a more structured and detailed version of the game. AD&D was released in a series of hardback rulebooks, including the Monster Manual, Player's Handbook, and Dungeon Master's Guide.

Tensions began to rise within TSR due to differing visions for the company's future and management styles. Gygax's authority was increasingly challenged by other executives.

Gygax was ousted from his leadership position at TSR following a power struggle with other executives, including Lorraine Williams. This marked a significant turning point in his career and relationship with the company he helped create.