Chameleon was a record label formed by producer, music entrepreneur and former Capitol Records A&R executive Stephen Powers, in association with Bob Marin, Managing Director of alternative rock importer Sounds True, and Richard Foos, co-founder of Rhino Records. An experienced indie label chief who previously founded Mountain Railroad Records and later Drive Entertainment, Powers quickly signed a distribution agreement with Capitol/EMI, bought out Marin and Foos, and brought in Hyatt Hotel heir, Daniel Pritzker, as a financial partner.
Pritzker was also a musician and songwriter, whose band Sonia Dada, later scored a #1 pop hit in Australia titled "You Don't Treat Me No Good," on the Chameleon label through Festival Records. Powers staffed Chameleon Music Group with industry veterans like Andy Frances, Bill Meehan, and the company grew quickly with 2-tiered, major-label distribution for its flagship Chameleon label and independent distribution for its many alternative imprints.
In 1991, Chameleon was named Independent Label of the Year by National Association of Independent Distributors (NAIRD), and Powers was named Independent Music Executive of the Year.
Bad Religion guitarist Brett Gurewitz was an employee, and Chameleon distributed his early Epitaph releases, such as L7's self-titled debut and T.S.O.L. Chameleon also distributed Minneapolis-based Twin/Tone Records and released the first albums by The Replacements, Soul Asylum and Hüsker Dü; punk label Posh Boy Records (Black Flag, Agent Orange, Redd Kross, Rodney on the ROQ) and had a subsidiary of their own called Dali Records. Chameleon also acquired and relaunched the legendary Chicago Blues Soul label, Vee-Jay Records.