Pianist and arranger Mary Lou Williams suggested to Hammond that he see guitarist Charlie Christian. Hammond had seen Christian perform in Oklahoma City in 1939 and recommended him to Goodman, but Goodman was uninterested in electric guitar and was put off by Christian's taste in gaudy clothing. During a break at a concert in Beverly Hills, Hammond inserted Christian into the band. Goodman started playing "Rose Room" on the assumption that Christian didn't know it, but his performance impressed everyone. Christian was a member of the Benny Goodman Sextet from 1939 to 1941, and during these two years he turned the electric guitar into a popular jazz instrument.
Goodman continued his success throughout the late 1930s with his big band, his trio and quartet, and the sextet formed in August 1939, the same month Goodman returned to Columbia Records after four years with RCA Victor. At Columbia, John Hammond, his future brother-in-law, produced most of his sessions. By the mid-1940s, however, big bands had lost much of their popularity. In 1941, ASCAP had a licensing war with music publishers. From 1942 to 1944 and again in 1948, the musicians' union went on strike against the major record labels in the United States, and singers acquired the popularity that the big bands had once enjoyed. During the 1942–44 strike, the War Department approached the union and requested the production of V-Discs, a set of records containing new recordings for soldiers to listen to, thereby boosting the rise of new artists Also, by the late 1940s, swing was no longer the dominant style of jazz musicians.
Goodman helped racial integration in America. In the early 1930s, black and white musicians could not play together in most clubs and concerts. In the Southern states, racial segregation was enforced by Jim Crow laws. Goodman hired Teddy Wilson for his trio and added vibraphonist Lionel Hampton for his quartet. In 1939 he hired guitarist Charlie Christian. This integration in music happened ten years before Jackie Robinson broke Major League Baseball's six-decade-long color line. "Goodman's popularity was such that he could remain financially viable without touring the South, where he would have been subject to arrest for violating Jim Crow laws." According to Jazz by Ken Burns, when someone asked him why he "played with that nigger" (referring to Teddy Wilson), Goodman replied, "I'll knock you out if you use that word around me again".