The first Punjabi film to be released was in the provincial capital of the Pakistani Punjab, Lahore. It has been generally called Punjwood, a portmanteau of Punjab and Hollywood, similar to the general Indian film-industry term Bollywood(Bombay and Hollywood); or, alternately, Pollywood. However, both terms are of disputed origins.
As of 2009, Punjwood has produced between 900 and 1,000 movies.The average number of releases per year in the 1970s was nine; in the 1980s, eight; and in the 1990s, six. In 1995, the number of films released was 11; it plummeted to seven in 1996 and touched a low of five in 1997. Since 2000s the Punjabi cinema has seen a revival with more releases every year featuring bigger budgets, home grown stars as well as bollywood actors of punjabi descent taking part.
K.D. Mehra made the first Punjabi film Sheila(also known as Pind di Kudi). Baby Noor Jehan was introduced as an actress and singer in this film. Sheila was made in Calcutta and released in Lahore, the capital of Punjab; it ran very successfully and was a hit across the province. Due to the success of this first film many more producers started making Punjabi films.
K.D. Mehra then made his second film, Heer Sial, in which M.M. Billoo Mehra assisted him. This film had new artists Balo and M. Ismail and Baby Noor Jehan. This film was also commercially successful.
Due to the vast Punjabi Community in Lahore and Punjab, these soon became significant Punjabi-language film markets. Studios opened up and many artists, producers, directors, and technicians from Bombay and Calcutta shifted to Lahore. Some prominent names were Shanta Apte, Motilal, Chandra Mohan, Hiralal, Noor Jehan, Mumtaz Shanti, Wali, Syed Attahullah Shah Hashmi, Krishna Kumar and Shanker Hussain.
Many journalists like B R Chopra, Ramanand Sagar has also settled in Lahore, where B R Chopra was running his film magazine Cine Herald. Ramanand Sagar was associated with Evening News and Syed Attahullah Shah Hashmi took out the film paper Adakar.