Like other aspects of Nevada's social and cultural life, professional theater suffered from the decline in the state's economy that spanned the turn of the twentieth century. By the 1930s, the economy had begun to recover somewhat, due in part to legalized gambling, the end of Prohibition, and Reno's emergence as a destination for Americans seeking speedy divorces. As early as 1896 local citizens had established the amateur Reno Dramatic Club—which in 1935 became the Reno Little Theatre (RLT)—and announced their first production, the contemporary Broadway hit, The Three-Cornered Moon, at the University of Nevada, Reno.

Edwin S. "Ed" Semenza (1910- ) was RLT's founding director and active in the organization until 1970. In 1939, Semenza obtained permission to produce the Western premiere of Clare Boothe Luce's The Women (1936), a satire of upper-class women written while Luce was in Reno obtaining a "quickie" divorce. The production made national news when the lead role of Mary Haines—who in the play goes to Reno for a divorce—was given to Helene Reynolds. The actress had married into the famous aluminum family of the same name, and coincidentally, was in town seeking her own divorce.

In 1941, RLT purchased Dania Hall at Seventh and Sierra streets, where it enjoyed a half-century of theatrical seasons until losing the building to casino expansion in the early 1990s. RLT then found a new home at Proctor R. Hug High School, where it continued to perform American and European classics, standards, and newer plays in repertory.

Maizie Harris Jesse and Jim Johns founded Carson City's Proscenium Players, Inc. (PPI), in 1965. The troupe's first production was Jack Kirkland's 1933 stage adaptation of Erskine Caldwell's novel Tobacco Road (1932). Currently housed in the Brewery Arts Center on West King Street in Carson City, PPI remains active to this day.

A number of other regional and local community theaters were established in the Reno area during the second half of the twentieth century. Many, such as Sparks Civic Theater, All Star Theater, The Space Theater, and Gothic North, have since gone defunct. The best-known among the survivors are the University of Nevada, Reno Department of Speech and Theatre's long-running Nevada Repertory Company; the Nevada Shakespeare Company (founded in 1989 as the Daring Explorations Theatre Company); and Bruka Theatre (1993), which leases space at First and Virginia streets.

In the last decades of the twentieth century and the early twenty-first century, the theater culture of Las Vegas has grown rapidly along with its population. More so than in Reno, legitimate theater in Las Vegas must compete with the modern equivalent of the Comstock's bawdy theater; lucrative burlesque-inspired productions featuring scantily-clad dancers and overtly sexual themes, and spectacular touring or locally based casino stage shows starring internationally recognized entertainers. Venues for serious theater include student companies and their facilities at the University of Nevada, Las Vegas (UNLV), local community colleges, and Las Vegas Academy, a performing arts high school; the Rainbow Company Youth Theatre (founded 1977); the Las Vegas Little Theatre (1978); Theatre in the Valley (1996) and others, supplemented as always by out-of-state touring companies.

However, due to this relatively late development of theater in Southern Nevada and also to the transient character of the population, resident dramatists with more than limited local reputations are still as scarce as in Comstock days. German-born Paavo Hall (1945- ) attended high school and college in Las Vegas, earned a master of fine arts (MFA) from the Yale School of drama, and currently lives in Las Vegas where he writes plays such as The Thirty-Six Dramatic Situations, which was produced Off-Off-Broadway in 1982. Children's playwright Brian Kral (1955- ), who teaches in the theater department at the College of Southern Nevada, has been widely performed. His One to Grow On (1983) portrays a young man's twelfth birthday spent in the company of his widowed grandfather. Clemente: The Measure of a Man (1999), about legendary baseball player Roberto Clemente, was premiered in Pittsburgh, Pennsylvania, by the Prime Stage Theatre. In 2003, Kral's play, Paper Lanterns, Paper Cranes, explored the effect of the atomic bombing of Hiroshima on the children living there in the 1950s, and received the Medallion Award from the American Alliance of Theatre and Education as "the best new published play in the United States."

Based in the northern part of the state, Nevada Shakespeare Company founder Jeanmarie Simpson (1959- ) adapts Shakespeare and writes politically tinged plays such as the two-person A Single Woman (2004), based on the life of U.S. Congresswoman Jeannette Rankin.

In 1989 an MFA program in playwriting was established at the University of Nevada, Las Vegas. Faculty included, among others, Jerry L. Crawford (1934- ), who began teaching theater at UNLV in 1962. Beverly Byers-Pevitts (c. 1940- ), chair of UNLV's Department of Theatre at the time, was succeeded in 1994 by Utah native Julie Jensen (1942- ), whose play Stray Dogs (1986) won the CBS/Dramatists Guild Playwriting Competition. Jensen's White Money, a contemporary working-class woman's southwestern odyssey, won the 1990 Award for New American Plays.

Though relatively few of them continue to live in Nevada, a number of working playwrights have emerged from the UNLV program, such as early graduates Red Shuttleworth (1944- ) and UNLV faculty member John D. Newsom (1953- ). Mark Jensen's (1967- ) plays include Pre-Matrimonial Conversation (1990), Seasons (1993), and Zombie Chick (2000), in which a Wiccan from Las Vegas recruits a Southwestern farm girl who can raise small animals from the dead; all have been produced across the U.S. Jason D. Martin (1972- ), whose Dying Light (1994), a one-act about terminal cancer, and Fall from Grace (2000), about a climber trapped on an Alaskan mountain, have been widely produced, anthologized, and recognized by programs such as the Kennedy Center American College Theatre Festival.

In recent decades, the Nevada Arts Council has supported playwrights, theater companies, and local arts organizations with occasional grants for the writing and staging of new plays. But as always, original dramatic art continues to struggle in Nevada. In Lucky 13: Short Plays about Arizona, Nevada and Utah, Red Shuttleworth points out that "only 2 percent of Nevada's entire 'professional theatre' budget was tossed into new play production in 1993." He cites the persistent problem faced by Nevada drama and American theatre in general since 1860: "Nevada's theatre directors like producing the works of dead or British writers (a very difficult distinction to be made here)."