This small, 250-seat theater was built inside the Folger Shakespeare Library as a replica of an inn-yard theater of Shakespeare's time, with "Juliet windows" on the stage and painted timber construction decorated with animals and Tudor roses. The overhead canopy is lit from behind to suggest the open-air theater construction of 17th-century England and painted with the famous "all the world's a stage" lines.

The Helen Hayes Award-winning Folger Theatre annually performs a three-play season of Shakespeare as well as contemporary plays inspired by the Bard in the intimate playhouse. Among the actors who have performed at the Folger are Sir Derek Jacobi, Lynn Redgrave, Sir Ian MacKellan, Dame Diana Rigg, as well as many of Washington's most beloved actors. Since 1994, Janet Alexander Griffin has served as Artistic Producer; she is also head of the Folger's Education and Public Programs. the library also invites outside companies, like the Shenandoah Shakespeare Express, to perform here too. In addition to Folger Theatre productions, the Folger stage is also host to two of the nation;s finest literary series, Folger Poetry and PEN/Faulkner, and the library's early music ensemeble, the Folger Consort. Home to the world's largest Shakespeare collection, the Folger Shakespeare Library is a major center for scholary research and a lively venue for exhibitions, cultural programs, and the performing arts. Believing Shakespeare is for everyone, it annually serves throusands of students in K-12 through festivals, workshops, publication and web site.

A gift to the American people from Henry Clay Folger and his wife Emily Jordan Folger, the Folger opened in April 1932. It is listed in the National Register of Historic Places.