Dixon signed with Chess Records as a recording artist, but he began performing less, being more involved with administrative tasks for the label. By 1951, he was a full-time employee at Chess, where he acted as producer, talent scout, session musician and staff songwriter. He was also a producer for the Chess subsidiary Checker Records. His relationship with Chess was sometimes strained, but he stayed with the label from 1948 to the early 1960s. During this time Dixon's output and influence were prodigious. From late 1956 to early 1959, he worked in a similar capacity for Cobra Records, for which he produced early singles for Otis Rush, Magic Sam, and Buddy Guy. He later recorded for Bluesville Records. From the late 1960s until the mid-1970s, Dixon ran his own record label, Yambo Records, and two subsidiary labels, Supreme and Spoonful. He released his 1971 album, Peace?, on Yambo and also singles by McKinley Mitchell, Lucky Peterson and others.  Dixon is considered one of the key figures in the creation of Chicago blues. He worked with Chuck Berry, Muddy Waters, Howlin' Wolf, Otis Rush, Bo Diddley, Joe Louis Walker, Little Walter, Sonny Boy Williamson, Koko Taylor, Little Milton, Eddie Boyd, Jimmy Witherspoon, Lowell Fulson, Willie Mabon, Memphis Slim, Washboard Sam, Jimmy Rogers, Sam Lay and others.  In December 1964, the Rolling Stones reached number one on the UK Singles Chart with their cover of Dixon's "Little Red Rooster". In the same year, the group also covered "I Just Want To Make Love To You" on their debut album, The Rolling Stones.

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