Most critics and audiences consider the period from the late 1980s to early 1990s as the golden age of Malayalam cinema. The Malayalam cinema of this period was characterised by detailed screenplays dealing with everyday life with a lucid narration of plot intermingling with humour and melancholy. This was aided by brilliant cinematography and lighting as in motion pictures like Perumthachan (1990), directed by Ajayan with Santosh Sivan as the cinematographer. These films are also remembered for their warm background music by composers like Johnson, as in the motion picture Namukku Parkkan Munthiri Thoppukal (1986) by Padmarajan. The golden age saw big actors like Mammootty, Mohanlal, etc.
Many of the movies released during this time narrowed the gap between art cinema and commercial cinema in the Malayalam film industry, as in Mrigaya starring Mammootty (1989, directed by I.V. Sasi and written by Lohithadas), Oru Vadakkan Veeragatha (1989), starring Mammootty,Kireedam (1989, directed by Sibi Malayil, starring Mohanlal and written by Lohithadas), Mathilukal starring Mammootty (1989, directed by Adoor Gopalakrishnan), Amaram starring Mammootty (1991, directed by Bharathan), Kakkothikkavile Appooppan Thaadikal (1988, directed by Kamal) and Sargam (1992, directed by Hariharan).
The period had an abundance of movies rich in creative humour from directors like Priyadarshan, Sathyan Anthikkad and Kamal. The era also saw well-crafted comedy by the Duo Siddique-Lal's, Ramji Rao Speaking (1989) and In Harihar Nagar (1990). The internationally acclaimed[according to whom?] Piravi (1989) by Shaji N. Karun was the first Malayalam film to win the Caméra d'Or-Mention at the Cannes Film Festival. Other notable contributions of this period include His Highness Abdullah (1990) directed by Sibi Malayil, Abhayam (1991) directed by Santosh Sivan, and the motion picture Daisy (1988) an expressive depiction of separation and longing set in a boarding school, directed by Prathap K. Pothan.
Further information: Malayalam films of the 1980s
Some examples are Mathilukal (1990) directed by Adoor Gopalakrishnan, Bharatham (1991) by Sibi Malayil, Ulladakkam (1992) directed by Kamal, Kilukkam (1991) directed by Priyadarshan, Kamaladalam (1992) by Sibi Malayil, Vidheyan (1993) by Adoor Gopalakrishnan, Devaasuram (1993) by I. V. Sasi, Manichithrathazhu (1993) by Fazil, Ponthan Mada (1993) by T. V. Chandran, and Desadanam (1997) by Jayaraaj. Swaham (1994), directed by Shaji N. Karun, was the second Malayalam film entry in the Cannes International Film Festival, where it was a nominee for the Palme d'Or. Murali Nair's Marana Simhasanam later won the Caméra d'Or at the 1999 Cannes Film Festival. Guru (1997) directed by Rajiv Anchal was chosen as India's official entry to the Oscars to be considered for nomination in the Best Foreign Film category for that year, making it the first and last film in Malayalam, so far, to be chosen for Oscar nomination.