Ory started playing music with homemade instruments in his childhood, and by his teens was leading a well-regarded band in southeast Louisiana. He kept La Place, Louisiana, as his base of operations because of family obligations until his twenty-first birthday, when he moved his band to New Orleans. He was one of the most influential trombonists of early jazz.
Ory was a banjo player during his youth, and it is said that his ability to play the banjo helped him develop "tailgate", a particular style of playing the trombone with a rhythmic line underneath the trumpets and cornets.
When Ory was living on Jackson Avenue, he was discovered by Buddy Bolden, playing his first new trombone, instead of an old Civil War trombone. Ory's sister said he was too young to play with Bolden.
Ory had one of the best-known bands in New Orleans in the 1910s, hiring many of the great jazz musicians of the city, including the cornetists Joe "King" Oliver, Mutt Carey, and Louis Armstrong, who joined the band in 1919; and the clarinetists Johnny Dodds and Jimmie Noone.
In 1919, he moved to Los Angeles—one of a number of New Orleans musicians to do so near that time—and he recorded there in 1921 with a band that included Mutt Carey, the clarinetist and pianist Dink Johnson, and the string bassist Ed Garland. Garland and Carey were longtime associates who would still be playing with Ory during his 1940s comeback. While in Los Angeles, Ory and his band recorded two instrumentals, "Ory's Creole Trombone" and "Society Blues", as well as a number of songs. They were the first jazz recordings made on the West Coast by an African-American jazz band from New Orleans. His band recorded with Nordskog Records; Ory paid Nordskog for the pressings and then sold them with his own label, "Kid Ory's Sunshine Orchestra", at Spikes Brothers Music Store in Los Angeles.