Bob Dylan (whose birthday was last Sunday) changed folk music twice. In 1963, he sang his own songs, changing folk music from a museum to a living genre.
In 1965, Dylan went onstage with members of the Butterfield Blues Band, which put an end to the rule that folk had to be played on acoustic instruments. Folkies like Jerry Garcia, Steve Stills and Neil Young grabbed electric guitars and started bands, while urban bluesmen like Howling Wolf and Muddy Waters started getting invites to folk clubs and festivals. This is all covered in the book Dylan Goes Electric by Elijah Wald. Music on Hoopla.