By 2004, the Zee Network already had a strong presence in northern and eastern India, with channels in Bengali, Gujarati, Marathi, and Punjabi; their proposed Telugu-language channel marked their first venture into the southern India entertainment market. In June 2004, they expected the channel to launch by August.
Their actual launch finally arrived in September.They initially featured a large amount of American films dubbed into Telugu; in August 2005, they also dubbed popular Bollywood film Sholay from Hindi into Telugu as an experiment.
By December 2005, despite having some popular programmes such as game show Gold Rush, hosted by popular female anchor Udayabhanu, as well as soap opera Nishabdam, overall Zee Telugu had only achieved a 1.24% weekday and 1.86% weekend market share in Andhra Pradesh. As a result, they re-launched themselves in order to shift their target market segment from mass market to that of upwardly mobile young professionals. They suffered a loss of Rs. 460 million in fiscal year 2005.
In late 2006, Zee Telugu began work on Sa Ri Ga Ma Pa, a Telugu-language singing competition. Anchored by Nandi Award winner Suneetha, the judges panel included renowned Telugu music figures Koti and Ramana Gogula, and was scheduled to run for 35 episodes.The show was so successful that by February 2007, they announced plans to launch Little Champs, a version of the show aimed at the ages six to thirteen market, hosted by former Indian Idol runner up N. C. Karunya.
In September 2007, the channel announced after months of deliberations that Sanjay Reddy would be their new chief executive officer, succeeding Ajay Kumar, who had left several months previously. Reddy had previously worked at The Walt Disney Company and Pearl Media. Reddy's plan in 2008 includes new soaps and children's programming.
The internet TV company, WatchIndia.TV, announced in 15 March 2008, that it had launched Zee Telugu on WatchIndia.TV to connecting the U.S.-based Indian diaspora with culture, entertainment, and news programming that includes SaReGaMaPa 2008 Voice of Youth and the TV celebrity dance competition, AATA.