Reed and Cale lived together on the Lower East Side, and, adding Reed's college acquaintances guitarist Sterling Morrison and drummer Maureen Tucker to the group, they formed The Velvet Underground. Though internally unstable (Cale left in 1968; Reed in 1970) and never commercially viable, the band has a long-standing reputation as one of the most influential underground bands in rock history.

The group caught the attention of Andy Warhol, who raised their profile immeasurably, if not improving their immediate fortunes. Warhol's associates inspired many of Reed's songs as he fell into a thriving, multifaceted artistic scene. Reed rarely gives an interview without paying homage to Warhol as a mentor figure. Still, conflict emerged when Warhol had the idea for the group to take on as "chanteuse" the European former model Nico. Reed and the others registered their objection by titling their debut album The Velvet Underground and Nico. Despite his initial resistance, Reed wrote several songs for Nico to sing, and the two were briefly lovers (as were Nico and Cale later). At the time, this album reached #131 on the charts.

Today, however, it is considered one of the most influential rock albums ever produced, influencing gothic rock, post punk, shoegazing and more. Rolling Stone has it listed as the 13th best rock album of all time. Brian Eno once famously stated that although few people bought the album, most of those who did were inspired to form their own band.

By the time the band recorded White Light/White Heat, Nico was dropped and Warhol fired, both against the wishes of Cale. Warhol's replacement as manager, Steve Sesnick, convinced Reed to drive Cale out of the band. Morrison and Tucker were discomfited by Reed's tactics but continued with the group. Cale's replacement was Doug Yule, whom Reed would often facetiously introduce as his younger brother. The group now took on a more pop-oriented sound and acted more as a vehicle for Reed to develop his songwriting craft. The group released two more albums with this line up: 1969's The Velvet Underground and 1970's Loaded. The latter included two of the group's most commercially successful songs, "Rock and Roll" and "Sweet Jane". Reed left the Velvet Underground in August 1970; the band disintegrated as core members Sterling Morrison and Maureen Tucker departed in August 1971 and early 1972, respectively. Doug Yule continued until early 1973 and released one more studio album, Squeeze, under the Velvet Underground name.

After the band's move to Atlantic's Cotillion label, their new manager pushed Reed to change the subject matter of his songs to lighter topics in hopes of resulting in more accessible and mainstream music. The band's album Loaded had taken more time to record than the previous three albums together and was written and produced to be "loaded with hits", but had not broken the band through to a wider audience. Reed briefly retired to his parents' home on Long Island.

Source: Lou Reed - Wikipedia, the free encyclopedia