The company was founded by actor and director Barbara Oliver in 1992 with the desire to continue to produce plays "about something important; ideas mediated by language and people, which are assisted by other elements like sets, lights and costumes," not dominated by them.

The founders of Aurora Theatre Company came together around the development and production of a new play: Dorothy Bryant's Dear Master.

In addition to their regular season, they produce an annual staged reading festival known as the Global Age Project.

[citation needed] Aurora Theatre Company has a small, intimate performance space, and has been referred to as “chamber theatre.” In 2001, the company moved to a dedicated custom-designed 150-seat theater in downtown Berkeley, situated immediately adjacent to the Berkeley Repertory Theatre.

Currently, more than one-third of the budget is allocated to acting salaries, with Aurora Theatre Company having been commended for the high percentage of Equity actors in its productions.