Under the leadership of Nina Eloise Whittington Vance (1914–1980),[1] Alley Theatre was founded in 1947 in a "former dance studio with an opening on Main Street.

"[2] In 1948, early paying members scouted Houston for a new location for the Alley, finally landing on an abandoned fan factory on Berry Avenue.

[6] and is regarded as “one of the most respected resident companies in the country.”[6] In 1977, Nina Vance was invited on the State Department tour of Russian theater, which led to an invitation from Nina to Galina Volchek, director of the Sovremennik Theater of Moscow, to come to Houston to produce Mikhail Roschin’s play, Echelon.

[7] Having forged alliances with such international luminaries as Edward Albee, Vanessa Redgrave and Frank Wildhorn, landmark theatrical events at the Alley have included the world premieres of Jekyll & Hyde, The Civil War, and in 1998, Not About Nightingales a newly discovered play by Tennessee Williams,[8] which moved to Broadway in 1999 and was nominated for six Tony Awards, including Best Play.

In response to Harvey, the company commissioned a touring children's play that was performed throughout Houston area schools.

There are three triangles in the main building and “the curves cling to and move around the triangles.”[17] Franzen designed the Alley in what is known as the Brutalist style, which was popular from the 1950s through the mid-1970s.

In 1994, Alley Theatre was chosen to receive the Twenty-Five Year Award by the American Institute of Architects/Houston, which recognizes distinguished architecture of lasting quality.

[21] In 1996, the Alley was featured in the “Book of American Architecture: 500 Notable Buildings from the 10th Century to Present by G. E. Kidder Smith.

[22] In June 2001, Tropical Storm Allison severely damaged the Neuhaus Stage located on the basement level of the theatre.

A massive renovation was undertaken and the theatre re-opened 2 months later in time for its annual production of A Christmas Carol.

[25] The Alley sponsors what is known as the Texas Young Playwrights Exchange (TYPE), which offers a skills-enhancing experience for people under the age of twenty who want to write for the stage.