Although 1960s horror was supposedly dominated by Hammer, Heffernan has pointed out that Hammer (and AIP) were both trying hard to break out of the low bracket market and into the middle bracket. This article focuses on the prestige horror films of the early 1960s, and not only looks at them as a coherent production trend (rather than as a series of individual or anomalous films) but in the process, offers a new context for an understanding of 1960s horror; that is, it demonstrates that the 1960s horror film was not simply low budget cinema but that it operated in almost all the key American film markets—the first run cinema, the low budget and the art cinema. Consequently, we cannot only see that Hammer and AIP, rather than simply the dominant form, were actually defined by their attempt to steer a course between different sectors of the market (they were from the low budget end but trying to move into the first run market, whilst also drawing on some of the distinction associated with the art cinema); but also that the prestige horror films had their own very specific problems to negotiate. These negotiations would also lay the foundations for the industry-wide transformations of the late 1960s. This article is published as part of a collection on gothic and horror.