The label was set up by the Palmer Brothers - Harry, Jeff, and Carl - initially as a soul label, but later concentrating on Jamaican music, releasing rocksteady singles from 1967. Much of the label's output was licensed from Jamaican producers such as Clancy Eccles, Alton Ellis, Bunny Lee, and Lee "Scratch" Perry, although they also released music by local talents such as Junior English and Delroy Washington. Derrick Morgan became one of Pama's biggest stars, having a UK chart hit with "Moon Hop". Pama's biggest hit came with Max Romeo's "Wet Dream", which reached #10 in the UK singles chart (despite lack of airplay, in part due to its risqué lyric), and sold over 250,000 copies.
The rivalry between Pama and their main UK reggae competitor, Trojan Records, was clear, with Trojan's Tighten Up series of compilations and Pama's similarly titled Straighten Up series going head to head. The rivalry had been fuelled by Bunny Lee's earlier licensing of Derrick Morgan's "Seven Letters" to both Pama and Trojan.
Pama introduced a number of subsidiary labels, often associated with individual producers, including Pama Supreme, Supreme, Crab, Bullet, Gas, Nu Beat/New Beat (Laurel Aitken), Success (Rupie Edwards), Camel, Escort, Unity (Bunny Lee), and Punch (Lee "Scratch" Perry).
The Pama label lasted until the mid-1970s, at which point Carl Palmer was the driving force, and concentrated on establishing a UK distribution network for reggae, later resurfacing as Jet Star, one of the largest distributors of reggae music.