By 1968, Farner and Brewer decided to leave and form a new band of their own. They recruited bass player Mel Schacher from Question Mark And The Mysterians and renamed themselves Grand Funk Railroad, inspired by a Michigan landmark, The Grand Trunk Railroad. By this time, Terry Knight had landed a job at Capitol Records in New York, but accepted an invitation to become the trio's manager. After a wildly successful performance at the Atlanta Pop Festival on July 4, 1969, the band landed a recording contract with Capitol Records and immediately began making its name by performing at several large Pop festivals. Their first singles reached the charts but Grand Funk soon proved its real strength in the album market. "On Time" reached number 27 in 1969, followed by the number 11 "Grand Funk" in 1970. By the Summer of that year they had become a major concert attraction, and their albums routinely reached the Top 10 for the next four years.

The group's huge success is often attributed to the public relations expertise of manager Knight. In 1970, for example, Knight reportedly paid $100,000 for a huge billboard in New York City's Times Square to promote the group's "Closer To Home" LP, which subsequently became their first Top 10 album, reaching number 6 and spawning the FM radio-staple title track. In June 1971, Grand Funk became only the second group (after the Beatles ) to sell out New York's Shea Stadium. Their recordings sold in greater quantity, even though many radio stations ignored their releases. 1970's "Live" album reached number 5 and included another concert and radio favorite in Farner's "Mean Mistreater". The next year saw the release of "Survival" and "E Pluribus Funk", the latter most notable for its round album cover. Around the time of recording E Pluribus Funk, it was decided to replace Terry Knight as Manager. Andy Cavaliere and later, John Eastman, father of Linda McCartney, were hired to take his place. The next few years were spent in litigation over the rights to the name Grand Funk Railroad and song royalties. The band eventually got to keep their name, but had to pay Knight a huge settlement.

In 1973, the group shortened its name officially to Grand Funk, and added a fourth member, former Fabulous Pack member, keyboard player Craig Frost. Now produced by Todd Rundgren, they finally cracked the singles market, reaching number 1 with the album title track "We're An American Band", a celebration of the group's times on the road. In 1974, a major revision of Little Eva's "The Loco-Motion" also reached the top (the first time in US chart history that a cover version of a song that had previously reached number 1 also attained that position). Later that year, they scored another top twenty hit with "Bad Time".

By the time 1975 rolled around, and the Disco craze in full swing, the band found that their style of garage band music had lost much of its appeal. The following year, the group reverted to its original name of Grand Funk Railroad and signed with MCA Records to record "Good Singin', Good Playin", produced by Frank Zappa. Although it is considered one of their finest by many fans, the album failed to reach the Top 50 and a discouraged Mark Farner decided to quit the group. He then went on to record two solo albums, while Don Brewer, Mel Schacher and Craig Frost added guitarist Billy Elworthy to form a new group they called simply Flint. The new band failed to find commercial success with their solitary album.

In 1981, Farner and Brewer added bassist, Dennis Ballinger and re-formed to record "Grand Funk Lives" and "What's Funk?" for the Full Moon label. Failing to recapture former glories, they split again. Farner returned to his solo career, recording three Christian albums before joining a band called Adrenalin. Don Brewer and Craig Frost joined Bob Seger's Silver Bullet Band.

In 1995, Mark Farner was asked to join Ringo Starr's All Starr Band and during the next year, Mark, Don and Mel decided to go out and play a few reunion concerts back east. Howard Eddy Jr. was asked to join as a sideman on keyboards, rhythm guitar, and back ground vocals. It wasn't long after that it became official, Grand Funk Railroad was reunited. The band toured extensively from 1996 to 1998, including a benefit for Bosnian orphans in 1997. Their 1998 tour was listed in Pollstar's Top 100 Shows as one of the top grossing tours of the year. Capitol Records released Grand Funk's Anthology "Thirty Years of Funk" on June 29, 1999.

The new millennium saw founding members Don Brewer and Mel Schacher joined by singer Max Carl (38 Special), lead guitarist Bruce Kulick (12 years with KISS), and keyboardist Tim Cashion (Bob Seger and Robert Palmer). Together, Brewer and Schacher created a new, dynamic and multi-talented five-piece band to not only carry on the tradition of the Grand Funk hits, but also having the potential to create a brand new chapter in the legacy of Grand Funk Railroad. In 2005 Grand Funk Railroad was inducted into the Michigan Rock and Roll Legends Hall of Fame, having had three of their recordings voted Legendary Michigan Songs: "We're an American Band" in 2008, "Closer To Home / I'm Your Captain" and "Some Kind Of Wonderful" in 2009. In July 2011 the band drew 25,000 people to their Molson Canal Series Concert outside Buffalo, NY. Their 2012 tour schedule had dates booked across the U.S. and Canada. Mark Farner also toured with his band NRG, and continued to record under his own name. 2012's concert plans had him in South America, Canada and the U.S.

Grand Funk Railroad continued to tour 40 shows a year and kicked off their 45 Years Of Grand Funk tour on January 25, 2014. In 2016, the band's website was still showing a busy touring schedule. These days their hits are still in heavy rotation on Classic Rock radio and are utilized in radio and TV ads. To date they have amassed 13 Gold and 10 Platinum records with world-wide sales of over twenty-five million units.