Development of Gujarati theatre happened through Sanskrit theatre acts, as in the fourteen century, Asaita Thakar, a folksinger of religious tales, started a participatory form known as Bhavai by means of historical and mythological themes and characters, creating consciousness among audiences on collective issues concerning the society. He is said to have written about 360 veshas (literally "dress") or acts, he performed them all over Gujarati-speaking western India with the help of his three sons.

The development of Gujarati theatre was mainly embarked by three dramatist-managers: Dahyabhai Jhaveri (1867-1902), and the brothers Moolji and Vaghaji Asharam Oza (1850-97). They introduced new elements of theatre to the stage like; tableaux, social themes, and conventional Garba dance of Gujarat. The Morbi Arya Subodh Natak Mandali and Wankaner Aryahit Vardhak Natak Mandali made a huge fame and name in the Kathiawar peninsula as travelling repertories. But, the style basically remained melodramatic, as one with fashionable clothing, painted two-dimensional settings, and melody, which had previously obtained a very vital spot in making Gujarati theatre trendy and famous.

With Indian cinema and films capturing the minds of audiences in the late 1920s, theatre showed two parallel drifts, independent and misguidedly opposing each other. For the so-called "old" professional theatre (also known as Parsi theatre outside the Indian state of Gujarat), this period was marked by money-investors owning or controlling companies, where each element (including the script) was hired and sold to the public. Writers like Brahmbhatt, Dwivedi, and Dossa; actors like Pransukh `Eddie Polo`, Mohan Lala, Ashraf Khan (1893-1962), and Chhagan `Romeo`; directors like Master Kasam, Mulchand Mama, and Kasambhai Nathubhai Mir (1906-69) worked for such troupes as Desi Natak Samaj, which normally staged formulaic plays maintaining status quo, while renting their playhouses to exhibit films for profit. Performances continued to be caught in the sentimental rut, finally leading to the closure of many companies, and pushing the remainder to travel in small towns and villages for their sustenance.

On one side, between the Quit India movement (1942) and Independence of India (1947), barefoot folklore research by Zaverchand Meghani, poetry by Umashankar Joshi (1911-88) and Sundaram, novels by Pannalal Patel, and short stories by Chunilal Madia (1922-68) provided a pragmatic pedestal to the depiction of pastoral Gujarat; Madia and Joshi also composed one-act drama in the identical style. Life in the state was generally full of the sense of sacrifice and hope. Quit India was followed by the Naval Mutiny in Mumbai, but the mature Gujarati theatre remained blissfully unaffected.

Individual playwrights and actors formed their own groups: the Indian People`s Theatre Association (IPTA, Mumbai and Ahmedabad), Bharatiya Vidya Bhavan, Indian National Theatre, and Rangbhoomi (Mumbai); Rangmandal, National Theatre, Rupak Sangh, and Natmandal (Ahmedabad); Rashtriya Kala Kendra (Surat). The decade after Independence also saw the launch of three educational institutions (Natya Vidya Mandir, Ahmedabad 1949; M.S. University, Vadodara, 1950; Saurashtra Sangeet Natak Academy, Rajkot, 1956), the publication of short-lived theatre magazines {Natak, `Drama; Nepathya, `Backstage`; Gujarati natya, `Gujarati Theatre`), the centenary celebrations of Gujarati theatre in 1953, and the commencement of state drama competitions of the then bilingual Bombay State in 1955, helping the spread of theatre consciousness.

In the early 1960s, the Indian National Theatre, Bahuroopi, and Rangbhoomi in Mumbai introduced many actors and managers like Vishnukumar Vyas, Pratap Oza, Madhukar Randeriya, Damu Zaveri, Lalu Shah, and Vanlata Mehta, while Rangmandal, Rupak Sangh, Darpana, and Javnika in Ahmadabad brought forward actors like Dhananjay Thaker, Kailash Pandya, Markand and Urmila Bhatt, Damini Mehta. Adi Marzban (1914-87) and Phiroz Antia were very active in Parsi theatre comedies. However, the most popular were the actor-couple Pravin (1936-80) and Sarita Joshi (1941- ) of Indian National Theatre, usually producing adapted Broadway hits, sometimes directing original drama such as Ramji Vania`s Moti veranan chokman ("Pearls Scattered in the Yard", 1969) and Madhu Rye`s Kumarni agasi (translated as The Terrace, 1972). Actor-director Kanti Madia also attracted full houses with his plays like Ame barafna pankhi ("We are Birds of Snow", 1974).

This period was marked by some good one-act drama from Jayanti Dalai (1909-70), Prabodh Joshi (1926-91), Shiv Kumar Joshi (1916-88), and Chunilal Madia. The brief one-act diversion imitated the European trend of absurdist theatre. There were notable sparks in writers like Labhshankar Thaker, Subhash Shah (Ek undar ane Jadunath, `A Rat and God`, 1966), and Adil Mansoori (Hathpag, `Hands and Feet`, 1970). This apparently rootless movement spread like wildfire, catching the imagination of young playwrights, but also died with the same speed when the Youth Festivals in the state were discontinued. Credit for an attitudinal change to the language of theatre should go to Madhu Rye, in Koipan ek phulnun nam bolo to, 1968, or Tell Me the Name of a Flower, who also gathered some dramatists in an informal self-training group, Akanth Sabarmati, in 1972. Newer voices included Shrikant Shah (Tirad, "Crack", 1972), Hasmukh Baradi (Kalo kamlo, "Black Blanket", 1975), Raghuvir Chaudhari (Sikandar Sani, 1976), and Chinu Modi (Navalsha Hirji, 1977). The authors turned to performing as well: Rye and Labhshankar Thaker with Darpana, Subhash Shah and Modi at Hathisingh Visual Arts Centre, Baradi in Garage Studio Theatre. These efforts benefited their search for a modern theatre language.

During 1980s, prominent change was towards stylization, especially in Thaker, Sitanshu Yashashchandra, and Baradi (Janardan Joseph and the verse drama Jashumati, and a quest for elements fresh from performing traditions rooted in the soil. The rich heritage of folk expressions like Bhavai and musical dance forms like Ras-Garba, or storytellers like Man Bhatt, contributed. Kailash Pandya (1923-2007) and Janak Dave extensively used folk elements in their productions. Stylistically at the opposite pole, professional companies had commercially sold-out shows like Vinod Jani`s Pritpiyu ne panetar ("Love, Husband and Wedding Gown", 1963), which still runs after a record 7000 performances, and those of Arpan Theatre led by Ramesh Amin.

The scholar-designers Goverdhan Panchal (1913-96) and Mansukh Joshi (1922-2000) had a strong and singular effect in evolving the correct theatre consciousness. Panchal reconstructed and researched conventional traditions, while Joshi won accolades and respect for work on folk scenography or stagecraft. The scheme employed by Sangeet Natak Akademi to encourage young potential directors discovered talents like Manvita Baradi, Prabhakar Dabhade, Aditi Desai, Janak Rawal and PS. Chari. Almost every year, the National festivals structured by Rajendra Bhagat, brought bright air and sights of newer researches in sister theatres. Over the last two decades one-act competitions and performances by the Indian National Theatre and Gujarat Samachar also raised interest among young people.