It is one of the oldest continuously operated non-profit, non-equity professional summer stock theaters in America.

Founded in 1946 by University of South Dakota drama professor Dr. Warren M. Lee, the Black Hills Playhouse and its dormitories for actors had been constructed by the Civilian Conservation Corps in 1933.

The playhouse opened on June 17, 1946, with plays presented in the Coolidge Inn on the grounds of the Game Lodge.

In 2013 a new costume shop was built with assistance from the South Dakota National Guard, Boxelder Job Corps and many other partners.

The Black Hills Playhouse is affiliated with the University of South Dakota College of Fine Arts.