The Sangeet Natak Akademi Award was introduced in the year 1954, by the prime body for performing arts in India, the Sangeet Natak Akademi. The award is recognised as the most prestigious national award for performing arts in India and is given in several categories like Hindustani Music (Vocal and Instrumental), Carnatic Music (Vocal and Instrumental), Dance, Theatre, Films, etc. The Sangeet Natak Akademi Award for Theatre is one of the main categories of the award and this category is divided into three different divisions.

The Sangeet Natak Akademi Award for Acting is one of the main divisions under the Sangeet Natak Akademi Award for Theatre category. The award is given to the talented actors working in theatres in various parts of India. The theatre actors in various mediums like Assamese, Bengali, Oriya, Gujarati, Kannada, etc. receive the award for making outstanding contributions to their respective theatre forms. The eminent Marathi theatre personality, Narayan Rao Rajhans `Bal Gandharva` and the Kannada theatre personality, Gubbi Veeranna were the first two receivers of the award in 1955.

The second section of the Sangeet Natak Akademi Award for Theatre category is direction. The Sangeet Natak Akademi Award for Direction is presented to the prominent and successful theatre directors in India, who have been working for several years and made significant contributions. Prithviraj Kapoor won the award for the first time in 1956 and several other directors have been honoured by the Sangeet Natak Akademi Award for Direction, since then.

Sangeet Natak Akademi Award for Playwriting is the third section of the Sangeet Natak Akademi Award for Theatre category. The award is given to the talented and eminent play writers, who are playing probably the most important role in Indian theatre. The play writers from different mediums like Bengali, Assamese, Kannada, Tamil, Punjabi, Malayalam, etc. receive the award from the Sangeet Natak Akademi. The famous Marathi play writer, B. V. `Mama` Warerkar was the first receiver of the Sangeet Natak Akademi Award for Playwriting in 1958.

Apart from acting, direction or playwriting, the Sangeet Natak Akademi Award for Theatre is also presented to the performers from other aspects of Theatre. They include the people involved in lighting, scenic design, theatre music, theatre make-up, costume design, etc. Tapas Sen became the first person to win the Sangeet Natak Akademi Award for other aspects of Theatre, when he won it for Lighting in 1974.