The series tackles racism, sexism and homophobia as it imagines a 1950s Tinseltown where minorities were not outcast and penalised for their differences.
But the show also tells another true story, as its group of budding stars make a film about Peg Entwistle, an aspiring actress who tragically took her own life.
Hollywood sees Archie Coleman, a gay, black screenwriter played by Jeremy Pope pen a film about Entwistle. At the suggestion of his director Ryamond (Darren Criss), he rewrites the tale as 'Meg', casting a black actress, Camille (Laura Harrier), in the lead role.
Their film is entirely fictionalised but Entwistle's story is very much real....
Who was Peg Entwistle?
Born Millicent Lilian Peg Entwistle on February 5, 1908, she sadly lost both of her parents at a young age, with her mother dying from illness and her father being killed in a hit-and-run accident.
A British actress, Entwistle got her big break when she played Hedvig in Henrik Ibsen's tragicomedy The Wild Duck on Broadway in 1925.
Entwistle, just 17 at the time, received critical acclaim for the run of shows, and it is even rumoured that a young Bette Davis was watching the production and told her mother she wanted to be "exactly like" the actress.
Entwistle made her last Broadway appearance in J.M. Barrie's Alice Sit By The Fire and despite her success on New York's theatre scene, she desperately desired to be a movie star and moved to Los Angeles during the Great Depression in 1932.
Her first Hollywood role was also on stage, in a play called The Mad Hopes alongside Billie Burke and Humphrey Bogart.
At the time, the Los Angeles Examiner described Entwistle as a "charming picture of youth."
Following the success of the production, she was cast as Hazel Clay Cousins in the film Thirteen Women.
Featuring one of Hollywood's first ever female ensemble casts, the movie saw a woman plot to kill twelve others with her supernatural powers.
Unfortunately, as touched on in Murphy's Netflix series, the director's cut of Thirteen Women failed to delight audiences at test screenings and the movie was cut drastically - with the final edit barely featuring Entwistle.
The film's producers, RKO studios, decided to end Entwistle's contract before Thirteen Women even had its premiere and as her work dried up, Entwistle and her actor husband Robert Keith hit a rough patch.
How did Peg Entwistle die?
On September 18, 1932, a woman hiking in the hills near the Hollywood sign (which then read 'Hollywoodland') came across Entwistle's shoes and handbag.
Inside the bag was a note, which was later published in newspapers. It read: "I am afraid, I am a coward. I am sorry for everything. If I had done this a long time ago, it would have saved a lot of pain. P.E."
The passerby then discovered Entwistle's body near the world-famous sign.
Coroners ruled that Entwistle had died from multiple fractures to the pelvis, after she jumped from the 'H' of the sign. She was just 24 years old.
The aftermath of Peg's death
Two days after her death, a funeral was held at the W.M. Strathers Mortuary in Hollywood and her body was later laid to rest in Glendale, Ohio.
In 2014, around 100 people marked the anniversary of Entwistle's death by gathering in a car park at Beachwood Market in Hollywood, to watch Thirteen Women on an outdoor screen.
Proceeds from ticket sales went to the American Foundation for Suicide Prevention.
Hollywood is available to stream on Netflix now