The service sector of the economy grew rapidly during this time. These are businesses that offer services instead of producing goods. 

These might include stores, hotels, restaurants, hospitals, and theaters. Some of this growth comes from the number of tourist attractions in the state, such as Great Smoky Mountain National Park, Dollywood, Graceland mansion in Memphis, and others.

HCA Healthcare was established as one of the first private healthcare corporations in the country in 1968. By the 1980s, the company managed more than 400 hospitals nationwide. Although it later restructured and became smaller, HCA was still active in the healthcare field into the new century.

First Tennessee Bank was founded as First National Bank of Memphis in 1864. It took its present name in 1977 and was one of the largest banks in the South. It diversified in the 1980s and 1990s picking up a nationwide check-clearing operation, discount brokerage services, and mortgages. The company has won numerous national awards as a good place to work, and is active in community services.

Fedex in Memphis has become the largest express transportation company in the world through its overnight delivery services. People today speak of “fedexing” a letter instead of saying "sending overnight. The company was established in 1973 with the Memphis airport as its hub. In 2000, the company employed 26,000 people at its Memphis site.

AutoZone was founded in Memphis in 1979. The company offered automobile supplies sold in a retail store setting with bright wide aisles and uniformed workers. The company has expanded over the years and by 1999 owned more than 3,000 stores in the U.S. and Mexico. The owner, J.R. (Pitt) Hyde, established a family foundation which has made many contributions to Memphis cultural institutions. 

Purity Dairy began in 1926 as a dairy farm in Davidson County with 80 rented cows.  Incorporated in 1946, Purity bought out some of its competitors and expanded its market during the 1960s, 1970s, and 1980s.  In 1980, using Nashville advertising agency Carden and Cherry, Purity produced memorable television commercials, such as the character Ernest P. Worrrell in "Know what I mean, Vern?"  This captured viewers' attention.  Although bought by Dean Foods in 1998, the Purity founder's grandson, Mark Ezell, still makes local management decisions.