By 1967, Brenda Holloway had been recording for Motown Records since 1964 and had struggled with Berry Gordy over control of her music, alleging that Gordy had forced her to sing Mary Wells' "leftover tracks" after the Motown singer left the label in 1964. Some of the songs in question included modest hits such as "When I'm Gone" and "Operator." Holloway was planning to release her long-awaited second album, Hurtin' & Cryin, which had released "Just Look What You've Done" as the leading track, but for unknown reasons the record was shelved. Along with her sister Patrice, using music provided by Frank Wilson and with additional help from Gordy himself, Holloway co-wrote "You've Made Me So Very Happy." Coincidentally, Holloway recorded the song after a breakup with a boyfriend.
Reaction to the song was stronger than Holloway's previous offerings, rising to number 39 on the Billboard Hot 100 and becoming Holloway's third Top-40 pop single. The song peaked at number 40 on the BillboardR&B singles chart. Shortly after the release of the song, Holloway left Motown and the song was eventually featured on the "second" Holloway album, The Artistry of Brenda Holloway. After two more years singing background for acts such as Joe Cocker, Holloway retired to marry a preacher and have a family. Holloway would eventually return to music full-time by the mid-1990s. Meanwhile, Holloway's song got a boost when the jazz-rock group Blood, Sweat & Tears covered it in 1969. The song became one of the group's biggest hits, reaching number 2 on the Billboard Hot 100 in the United States in April 1969 and number 35 in the United Kingdom in May of that year. The song was also covered by fellow Motown acts such as Edwin Starr and Blinky in 1969, The Temptations in 1970, The Miracles, also in 1970, and Diana Ross in 1994 on a Berry Gordy tribute album. Lou Rawls also covered the song. It also been covered by pop musician Gloria Estefan; she included the song on her album Hold Me, Thrill Me, Kiss Me in 1994, which was a collection of covers that inspired her musical career. In 1977, Barry Williams performed the song on an episode of The Brady Bunch Variety Hour. In 2012, it was covered by Julian Ovenden on his debut album.