The pressing threat of communism and Cold War apprehensions steadily increased after World War II, and by the late 1940s and 1950s, America's fear of all things “red” reached near hysteria. In 1947, President Truman put into motion the Federal Employee Loyalty Program, which permitted the FBI to investigate and dismiss government workers deemed a security risk to the country. That same year, this fear was also directed toward Hollywood with the revival of the House Un-American Activities Committee (HUAC). Spearheaded by Republican J. Parnell Thomas, the HUAC hearings strove to prove that communist ideals and leftist propaganda had infiltrated Hollywood films. HUAC ultimately blacklisted screenwriters, directors, actors, musicians, and other entertainers, and destroyed the careers of over 300 artists. During this tumultuous period, fear of the blacklist significantly affected film production by inducing producers and studio heads to sidestep socially controversial subjects. In fact, by 1948 much of the industry avoided social commentary films—unless they spread messages of anticommunism— and instead focused on the lives of Middle America, a much safer subject.

Also contributing to the studio system's unpredictability and upheaval was the rapidly growing television industry. Much more convenient than going out to the movies, television brought entertainment directly into Americans’ homes, competing with Hollywood. The 1948–49 season was the first that all four networks (ABC, CBS, Dumont, and NBC) had primetime content Monday through Friday. With such hit shows as Texaco Star Theater, Candid Camera, Ed Sullivan, and Howdy Doody filling the airwaves, Americans, many of whom were moving away from city life into the suburbs, took the plunge and bought their first television set. Hollywood, anxious about losing moviegoers to this new medium, responded in several ways in hopes of winning back its audience. As television was limited to small, black-and-white, and often fuzzy images, Hollywood countered with vibrant colors, enormous screens, glamorous stars, and sophisticated storylines, emphasizing everything it had that television did not.

Lewis Milestone's The Red Pony, released in 1949, clearly reflects the influences of the decade's societal and industrial transformations. Although released by Republic Pictures, a longtime creator of B westerns, The Red Pony was an exception to the company's standards.