He was a partner in his brother's record store in Chicago in 1923 when he met Jelly Roll Morton. Within a short time, he had sold his share of the store and become an A & R man, the old name for a record producer. His first big success was "It's Tight Like That" with Tampa Red and soon-to-be gospel music legend Thomas A. Dorsey, then still known as Georgia Tom.
He worked for several record companies simultaneously in the 1930s, including RCA Victor, Bluebird, Columbia records, and Okeh records. Among the artists he recorded were Joe "King" Oliver, Big Bill Broonzy, the first Sonny Boy Williamson, Memphis Minnie, Roosevelt Sykes, Lonnie Johnson, Big Joe Williams, Bukka White, Washboard Sam, Champion Jack Dupree, Jazz Gillum, Big Boy Crudup, Victoria Spivey and Leroy Carr.
In many ways he can be considered a founder of the Chicago blues, although he greatly favored acoustic over electric performances. Most of his recordings were made with a small group of session players and had a similar sound overall. Muddy Waters, who was rejected when he auditioned for Melrose, called it "sweet jazz". The Melrose sound dominated Chicago blues before World War II, but the arrival of large numbers of Southern African Americans in Chicago during and after the war brought Melrose's dominance to an end as a harder, deeper blues sound proved more popular with the new audience.
Melrose is a member of the Blues Foundation Hall of Fame.
As was the custom at the time (and not just in blues music), Melrose often assigned composer credit and performance rights of the artists' songs to himself, paying the artists only for the record session. Nonetheless, he unquestionably had great energy and excellent taste in seeking out performers and produced some foundation blues recordings. His name appears on "Reefer Head Blues", recorded by Jazz Gillum and Aerosmith, and "Me and My Chauffeur", recorded by Memphis Minnie and Jefferson Airplane. His name also appears on three Big Boy Crudup songs recorded by Elvis Presley.
His brother, Walter Melrose, was a music publisher who received songwriter credit for several songs identified with the Original Dixieland Jass Band, including the standards "High Society" and "Tin Roof Blues", both of which were hits as late as the 1950s.