Theatre on the Square is a professionally managed theatre started in September 1988 by the theatre's current Executive Artistic Director Ron Spencer and a group of friends. The theatre presented over forty productions in its first five years at its Fountain Square location winning numerous awards.

In July of 1993, the theatre relocated to the historic Chatham Arch district on Massachusetts Avenue. This move prompted Mayor Steve Goldsmith to declare Massachusetts Avenue Indianapolis' Official Arts District.

In the fall of 1996 the theatre opened a second stage at the Chatham Arch location. The second stage allows the theatre to expand its season of predominately premieres and original works.