
This version of SFM, which ran using Source's in-game tools framework, was unintentionally leaked during the public beta of Team Fortress 2 in September 2007.

The tool's full potential was finally realized with the release of The Orange Box, particularly with the Meet the Team featurettes for Team Fortress 2. SFM was successfully used to make Day of Defeat: Source trailers with experimental effects that could not be achieved in real-time. SFM was developed internally at Valve in 2005 and forked from the in-game demo playback tool found in Source. Users can also rig 3D characters and can use inverse kinematics to manually animate movements that do not already exist in the games they imported assets from. Additionally, SFM supports a wide range of cinematographic effects and techniques such as motion blur, Tyndall effects, dynamic lighting, and depth of field. Users can either create new projects or import data from Source-based games to extend their SFM animations, with the ability to record and edit the same screen endlessly.

SFM also allows for the creation of still images, art, and posters. Source Filmmaker is a tool for animating, editing, and rendering 3D animated videos using assets from different games which use the Source platform, including sounds, models, and backdrops. On June 27, 2012, Valve released a free, open beta version of SFM via Steam.

Source Filmmaker has been used to create many community-based animated shorts for popular Source games, including Team Fortress 2, the Left 4 Dead series, and Half-Life 2. Source Filmmaker (often abbreviated as SFM) is a 3D computer graphics software toolset published by Valve for creating animated films, which utilizes the Source game engine.
