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In 1967, after Garden Wall had disbanded, Gabriel, Banks, and Stewart were invited by fellow pupils Anthony Phillips and Mike Rutherford to work on a demo tape of songs. Gabriel and Banks contributed "She is Beautiful", the first song they wrote together. The tape was sent to former Charterhouse pupil turned musician Jonathan King, who was immediately enthusiastic largely due to Gabriel's vocals. He signed the group and suggested a band name of Gabriel's Angels, but it was unpopular with the other members. They settled on King's other suggestion, Genesis. After King suggested they stick towards more straightforward pop, Gabriel and Banks wrote "The Silent Sun" as a pastiche of the Bee Gees, one of King's favourite bands. It became Genesis's first single, released in 1968. It was included on their first studio album, From Genesis to Revelation (1968), which saw Gabriel play the flute.

After the commercial failure of From Genesis to Revelation, the band went their separate ways and Gabriel continued his studies at Charterhouse. In September 1969, Gabriel, Banks, Rutherford, and Phillips decided to drop their plans and make Genesis a full-time working band. In early 1970, Gabriel played the flute on Mona Bone Jakon (1970) by Cat Stevens. The second Genesis album, Trespass (1970), marked Gabriel expanding his musical output with the accordion, tambourine, and bass drum, and incorporate his soul music influences. He wrote the lyrics to "The Knife" as a parody of a protest song. The album sold little and at one point, Gabriel secured a place at London School of Film Technique because Genesis "seemed to be dying." Genesis recruited guitarist Steve Hackett after Gabriel spotted his advert in the Melody Maker. Their next album, Nursery Cryme (1971), features Gabriel playing the oboe. Its opener, "The Musical Box", was their first song in which Gabriel incorporated a story and characters into the lyrics.

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