The Living Stage Theatre Company began in 1966 as a venture of Arena Stage and Robert Alexander. Known from 1966-1968 as The Children's Theatre, the Living Stage from the beginning dedicated itself to programming with a social consciousness and a desire to effect societal change through performance. Robert Alexander was the theatre's founder and until 1995 its director. Alexander brought an adapted street and guerilla theater style to the D.C. area after becoming disenchanted with traditional theatre's "middle-class" audience. The Living Stage provided training to actors in the art of improvisational theater through tuition free schooling during the summers, as well as through weekend long workshop training for social workers, teachers, and other professionals throughout their 9 month season. While most of the Stage's workshops were held on site at schools, museums, and prisons, the Living Stage did have its own formal space in Washington, D.C. on 14th and T Streets NW. The Living Stage put on productions across Northern Virginia in schools, youth homes, and even prisons like the Lorton Penitentiary. Senior members of the company, like Jennifer Nelson and Oran Sandel helped to send the Living Stage across the country as well. Their efforts were largely funded through vigorous campaigning for grants and fund raising through the National Endowment for the Arts (NEA) and other private foundations. The Living Stage also received substantial financial assistance from its parent company, the Washington Drama Society, Inc.

The Living Stage performance style consisted of "The Jam," "The Performance," and "The Workshop," a three part study that was used at most of their venues. The first part, or "Jam," consisted of actors working with their audience to "rap," make music, and "jam" through spoken or sung words accompanied by instrumentals typically provided by audience members. The actors then moved into the "performance" itself. During the performance the actors put on an improvised theater production directed by a senior member of the cast and assisted by one or two audience members. The "Workshop" began from there; during the workshop, the audience took over the scene, while still directed by the actors, and was encouraged to make it their own. Audiences gave their opinions and thoughts on each performance in the form of production reports that were collected by the Living Stage.

The projects that the Living Stage put on typically dealt with controversial and sensitive topics like race, economic inequality, the dangers of an overzealous American foreign policy, the atom bomb, violence, and freedom. The "Baltimore Incident" of 1971 is an excellent example of how controversial these productions could be. No matter how mixed opinions were, the Living Stage always elicited a reaction with their improvisational performances. During the 1980s the Living Stage began to reach out extensively to local initiatives like The District's Alcohol and Drug Abuse Services Administration and created their own Community Services Project in order to continue to bring theater and creativity to underserved sections of society. The Living Stage championed New Left ideals like equality and social justice throughout the Reagan years, despite some criticisms about their message being "anachronistic."

The organization began to sunset in the first half of the 1990s as many of its founding and senior members took their skills elsewhere. Robert Alexander himself left in 1995 to start educating people in the art of improvisational theater full time. Jennifer Nelson, David Matthew Proctor, Ezra Knight, and others began to filter away in the 1990s to pursue their own acting goals and the Living Stage would officially close its doors in 2002.