The Looney Tunes series began slightly earlier than the Merrie Melodies series. The first Looney Tunes cartoon -- "Sinkin' in the Bathtub" -- appeared in 1930. Merrie Melodies began a year later with "Lady, Play Your Mandolin!" Both series were an effort to capitalize on the success of Walt Disney's Silly Symphonies series. Both featured songs from Warner Bros.' playlist, though Merrie Melodies tended to focus more on music and musical numbers in general than Looney Tunes.
Warner developed Looney Tunes and Merrie Melodies under the auspices of producer Leon Schlesinger. Hugh Harmon was initially in charge of Looney Tunes and Rudolph Ising produced Merrie Melodies. The titles thus served as a way of determining under whose leadership a production was being developed.
Originally, Merrie Melodies were intended to be single instance cartoons, without any recurring characters, while Looney Tunes featured characters who would appear again and again over multiple cartoons. They initially featured protean Warner Bros. characters such as Bosko and Honey, though many of their great characters -- such as Bugs Bunny and Daffy Duck -- also first appeared on Looney Tunes. As the years went by, the practice began to slip; Porky Pig, for example, made his first appearance in a Merrie Melody, not a Looney Tune.
Warner began shooting Merrie Melodies in color starting in 1934. For the next nine years, Merrie Melodies were in color and Looney Tunes were in black and white. In 1943, however, Warners started shooting Looney Tunes in color as well, further blurring the difference between them.
Warner Bros. developed Looney Tunes and Merrie Melodies roughly equally, with each line producing about the same number of cartoons each year. Schlesinger retired in 1944, which prompted the company to produce all their cartoons in-house. At that point, the already tenuous difference between the two lines completely disappeared; as cartoonist Fritz Freling said in a 1975 interview, "I never knew if a film I was making would be a Looney Tunes or a Merrie Melody, and what the hell difference would it make, anyway?" Warner kept both the titles because they were both well-established brands and there was no reason to trifle with success.