Gerry Marsden formed the group in 1959 with his brother, Fred, Les Chadwick and Arthur McMahon. They rivalled the Beatles early in their career, playing in the same areas of Hamburg, Germany and Liverpool. McMahon (known as Arthur Mack) was replaced on piano by Les Maguire around 1961. They are known to have rehearsed at Camell Laird shipping yard at Birkenhead.

Gerry & the Pacemakers was the second to sign with Brian Epstein, who later signed them with Columbia Records (a sister label to The Beatles label Parlophone under EMI). They began recording in early 1963 with "How Do You Do It?", a song written by Mitch Murray that Adam Faith had turned down and one that The Beatles chose not to release (they did record the song but chose to release their own song "Please Please Me").

The song was produced by George Martin and became a number one hit in the UK, until being replaced at the top by "From Me to You", The Beatles' third single.

Gerry and The Pacemakers' next two singles, Murray's "I Like It" and Rodgers and Hammerstein's "You'll Never Walk Alone", both also reached number one in the UK Singles Chart. Never before had the first three singles by a performer all reached the top spot (the feat would not be duplicated until Frankie Goes to Hollywood did it in the 1980s).

"You'll Never Walk Alone" had been a favourite of Gerry Marsden's since seeing Carousel growing up (he turned down the Beatles' "Hello Little Girl" for this slot, which then became the first hit for The Fourmost). It soon became the signature tune of Liverpool Football Club. To this day, the song remains a football anthem, there and elsewhere, a phenomenon due to Gerry Marsden, rather than its Broadway composers.

Despite this early success, Gerry & The Pacemakers never had another number one single in the UK. Gerry Marsden began writing most of their own songs, including "It's Gonna Be All Right", "I'm the One", and "Ferry Cross the Mersey", as well as their first and biggest U.S. hit, "Don't Let the Sun Catch You Crying", which peaked at #4, and which Gerry Marsden initially gave to Decca recording artist Louise Cordet in 1963. She recorded the song, but without commercial success.

They also starred in an early 1965 film called Ferry Cross the Mersey (sometimes referred to as "Gerry & The Pacemakers' version of A Hard Day's Night"), for which Marsden wrote much of the soundtrack.

The title song was revived in the 1980s as a charity single for a ferry disaster appeal, giving Gerry another British number one in association with other Liverpool stars, including Paul McCartney and Frankie Goes to Hollywood's Holly Johnson.