In the summer of '89, while driving cross-country, a couple of college kids with a band had the notion to start a record label.

Mac McCaughan and Laura Ballance set up shop in Ballance's Chapel Hill, N.C., bedroom and began fortifying the college airwaves at a time when quality was sorely needed. Their stock in trade was 45 rpm singles, rechristened "seven-inches."

Back then, the words "grunge," "slacker" and "Generation X" weren't yet common parlance, never mind "extreme sports" and "MP3." A lot has changed in the 15 years since Merge Records began.

The label, founded and run by the linchpins of Superchunk, has evolved the same way that Superchunk has: from young, loud and snotty to polished grown-up music, without compromising its independent edge.

In honor of its 15th anniversary, Merge has released "Old Enough to Know Better," a 61-track, three-disc set and the label's 250th release. (Grass-roots idealism still reigns; all of the $14.98 list price goes to support the Future of Music Coalition, a nonprofit group that explores music and technology issues.)

The first two discs are greatest hits from the label's history, an easy-listening collection that eschews a strict chronology for a looser, mix-tape feel. The label doesn't have a firmly stereotypical sound, but the selections emphasize the bands' similarities: unpolished vocals, choppy but tuneful guitars, an excellent sense of melody. Most Merge records are infinitely hummable.

If there's a disc here to leave in the CD player, it's the first one: for Polvo's dissonant bliss, for the Clientele's delicate "(I Want You) More Than Ever," for Superchunk and the Magnetic Fields, among the few Merge acts to garner mainstream notice.

Among the guitar rock there's plenty of texture: Breadwinner's jazzy "Exploder," Pipe's angry "Chula," Pram's "Track of the Cat" and its smoldering Ennio Morricone vibe. Pram, Neutral Milk Hotel and Lambchop remind us that too few indie rock bands blended in some horns, and fewer still did it well.

Highlights of Disc 2 include the soothing "Ladybug Transistor," a snappy clap-along number by the Rosebuds, and there's always room for a little more Spoon.

Disc 3 offers the ever-popular outtakes and curiosities, most notably the somber beauty of Crooked Fingers' "La Maleta Fea." It's a little light on the fun covers, but Angels of Epistemology (from back in the day) provide a credible rendition of the Buzzcocks' "Fiction Romance," and Spoon bounds through Yo La Tengo's "Decora."

What's missing? Top of the why-didn't-you list: The Bats' cover of Harlan Howard's "Streets of Baltimore," a gorgeous song by a brilliant, underexposed band. And alas, Merge scooped itself by releasing some of its best singles on its fifth-anniversary compilation, so there's no Archers of Loaf, Drive Like Jehu or Squirrel Nut Zippers left for this album.

On one of the band's first singles, Superchunk famously cursed out the despised boss at a dead-end job: "I'm working, but I'm not working for you." It's doubtful they knew it then, but McCaughan and Ballance have managed to become their own bosses (in their own building), through the music they love: a happy ending for indie rock.

Label founders Laura Ballance and Mac McCaughan serve up a 61-track set.