In Bolton, Arkwright worked for the peruke maker Edward Pollit, until Pollit's death. By 1755, Arkwright was working as a barber as well as a peruke maker. He married Patience Holt in March 1755. Their son, also called Richard, eventually joined his father’s business. Patience died in 1756 and, five years later, Arkwright married again. His second wife, Margaret, provided money to pay off Arkwright’s debts and to set him up as a publican in 1762. Arkwright’s new venture did not last long, and he returned to his trade of barber and peruke maker.

Arkwright lived at the heart of the emerging textile industry in Lancashire and would have been aware of the developments being made in spinning machinery. Arkwright began developing a machine of his own, assisted by a clockmaker called John Kay. Arkwright and Kay met in a public house in Warrington early in 1767, and Kay agreed to turn some brass for Arkwright’s machine. It is believed that, during subsequent meetings, the pair talked about using rollers in a spinning machine, with Kay agreeing to make Arkwright a small model.

As became apparent in a later period, when Arkwright attempted to make money from his patented invention, Kay had taken the idea of roller spinning from his neighbour, Thomas Highs of Leigh. Kay had worked for Highs and had seen the spinning machine Highs was developing. Highs also claimed that he knew Arkwright at the time that Highs, with Kay's help, was working on his roller spinning machine.

For unknown reasons, Highs stopped working on his machine and Arkwright took it up with Kay’s assistance. Arkwright approached the Warrington machine maker Peter Atherton to build a machine for him. Atherton turned down the opportunity but provided Arkwright with a smith and a watch-tool maker. Kay took responsibility for developing the machine’s clockwork mechanism.

Towards the end of 1767, Arkwright took the machine to Manchester to secure investment in its further development, without success. In January 1768, Arkwright and Kay moved to Preston, where Arkwright hoped to improve the machine, using rollers to accommodate the length of the cotton fibres and weighting the top rollers to prevent the fibres twisting in the drawing space. The work was done in secret. Kay became indentured to Arkwright, and in April 1768 the pair moved to Nottingham, an established centre for textile manufacture. Before leaving Preston, Arkwright entered into partnership with two relatives, John Smalley, landlord of The Bull inn, Preston, and David Thornley, a merchant, of Liverpool. Smalley and Thornley provided the necessary investment to further develop the machine. Smalley, Thornley and his brother-in-law Henry Brown, a watchmaker, joined Arkwright and Kay in Nottingham soon afterwards.

Arkwright formalised his partnership with Smalley and Thornley in May 1768, forming Richard Arkwright & Co to exploit the potential of his roller spinning machine. Arkwright lodged a petition for a patent on his machine in June 1768, but the patent was not granted until July 1769. Richard Arkwright & Co leased premises in Nottingham in September 1768 where they built the machine and used it to spin cotton. Thornley’s money ran out by June 1769 and he reduced his share in the business by a third, selling to Smalley, who became the majority partner. Arkwright sought additional funds from the Nottingham bankers Ichabod and John Wright, but they failed to see the potential in the machine and instead suggested Samuel Need, a wealthy hosier, and his business partner, the inventor and businessman Jedediah Strutt. Need and Strutt invested £500 and joined the partnership in January 1770. The partnership then commissioned Samuel Stretton to convert the premises they were renting into a horse-powered mill. The mill went into operation in December 1772, once a full scale version of Arkwright and Kay’s model machine had been constructed.

While work on the machine continued, the partners leased land in Cromford, Derbyshire in August 1771, where they planned to build mills for spinning a variety of textiles, including cotton, linen and silk. Cromford had the advantage of a good supply of water and of labour. The rapidly developing machinery produced high quality yarn with smaller labour input than Arkwright had expected, bringing success to the company, which sold its products as soon as they had been manufactured, demand was so high. Strutt successfully lobbied parliament in 1774 for the reduction of excise duties on British-made cotton goods, resulting in the birth of a new industry.

The company expanded rapidly from the mid-1770s, with a new mill opened at Cromford in 1776, factories in Belper and Milford were created between 1776 and 1777, with construction of a mill at Birkacre, Chorley in 1777, and mills started at Bakewell, Wirksworth, Alport, Litton, Rochester and Manchester between 1777 and 1780.

At this point, Arkwright held only 20% of the shares in the company, making him a minority partner. Wanting to dominate the emerging industry and make more money from his inventions, in 1775 he patented a number of other machines which prepared silk, cotton, flax and wool for spinning. He shared the rights to the 1769 patent with his partners, who had funded its development, but he retained the sole rights to his new patent. Arkwright also sought to consolidate his position in the company. Thornley and Brown had died in 1772 and Kay was dismissed in unpleasant circumstances the same year. Arkwright bought out Thornley’s widow, but he was unable to take over the shares of the other partners. In 1774, he planned to sell his shares to Need and Strutt and set up in business on his own. However, under the terms of the 1769 patent, Arkwright would not have been able to spin any yarn without Smalley’s agreement, and his agreement with Need and Strutt was not put into action. Arkwright’s relationship with Smalley deteriorated, with Smalley hoping to force Arkwright from the company. The matter went to arbitration and Smalley left his position as manager at Cromford Mill. Arkwright’s partnership with Need and Strutt continued until Need’s death in 1781.

When the partnership was dissolved, Strutt took the factories at Belper and Milford, and Arkwright retained the remainder of the mills. Arkwright had already attempted to increase his income from his inventions in 1778 by licensing his machines to other manufacturers. However, it is likely that there were already too many unlicensed users to make this possible. In 1781, Arkwright decided to enforce his patents at law. This decision became a turning point in Arkwright’s career, and in the development of the cotton industry.

Arkwright was successful in enforcing his 1775 patent, held by him alone, but his resulting monopoly met with resistance from Lancashire manufacturers and the Manchester committee of trade, who resented the block Arkwright’s patent placed on other technical developments happening in the industry. The 1769 patent was due to expire in the summer of 1783, at which point Arkwright would lose his hold on the spinning and preparatory processes. He sought an extension of his rights by consolidating his patents and extending their duration to 1789. Arkwright met with a number of challenges to his patents. He won some, but the strength of others was insufficient for him to retain the patents. He went on to recover his carding patent in 1785, resulting in his 1775 patent being challenged by the Crown. At this patent trial, Thomas Highs, John Kay and Kay’s wife all testified against Arkwright, on the grounds that his 1769 invention was not original. The jury decided that there was insufficient evidence for Arkwright’s claim to the invention. He lost the trial, and his patent was cancelled in November 1785.

During the course of the legal actions, Arkwright’s mill at Birkacre had been destroyed by Lancashire handworkers. Arkwright transferred the ownership of the mills at Bakewell, Rocester, Litton, and Manchester to his son, and consolidated his own interests in the mills at Cromford, Wirksworth, Nottingham, and the newest mill at Masson, by the River Derwent. Through trade with merchants in Manchester and London and his expansion into Scotland, Arkwright remained Britain's largest cotton spinner, despite the loss of the patent. His hold on the industry was only broken by the technical advances of Crompton's spinning mule.

Arkwright has been held by many as the model of the self-made man. He was skilled in business and his ability to see an idea and move it forward in development led to major innovations in the textile industry. The mills he built at Cromford were for a long period the standard for the industry, particularly the introduction of shift work and the employment of room overseers to ensure 24 hour operation of the mills.

Arkwright combined water power, innovative machinery, semi-skilled labour and a new raw material to create mass production. His contemporaries copied him.

In July 1792, Arkwright fell ill. He eventually died on 3 August 1792 at his home in Cromford.