Joan Ganz Cooney and Lloyd Morrisett developed the idea to form an organization to produce the Sesame Street television series.

Gerald S. Lesser and Edward L. Palmer were hired to perform research for the series; they were responsible for developing a system of planning, production, and evaluation, and the interaction between television producers and educators, later termed the "CTW model".

The early 1980s were a challenging period for the Workshop; difficulty finding audiences for their other productions and a series of bad investments harmed the organization until licensing agreements stabilized its revenues by 1985.

Following the success of Sesame Street, the CTW developed other activities, including unsuccessful ventures into adult programs, the publications of books and music, and international co-productions.

[5] Early childhood educational research at the time had shown that when children were prepared to succeed in school, they earned better grades and learned more effectively.

[7] The topic of developmental psychology had grown during this period, and scientists were beginning to understand that changes of early childhood education could increase children's cognitive growth.

[12] The conversation during the party, which according to writer Michael Davis was the start of a five-decade long professional relationship between Cooney and Morrisett, turned to the possibilities of using television to educate young children.

[13] A week later, Cooney and Freedman met with Morrisett at the office of Carnegie Corporation to discuss doing a feasibility study for creating an educational television program for preschoolers.

[8] In the summer of 1967, Cooney took a leave of absence from WNDT, and funded by Carnegie Corporation, traveled the U.S. and Canada interviewing experts in child development, education, and television.

[15] The report described what the new series, which became Sesame Street, would be like and proposed the creation of a company that managed its production, which eventually became known as the Children's Television Workshop (CTW).

[23] Cooney's proposal included using in-house formative research that would inform and improve production, and independent summative evaluations to test the show's effect on its young viewers' learning.

[24][25] In 1967, Morrisett recruited Harvard University professor Gerald S. Lesser, whom he had met while they were both psychology students at Yale,[26] to help develop and lead the Workshop's research department.

[31] Bob Hatch was hired to publicize their new series, both before its premiere and to take advantage of the media attention concerning Sesame Street during its first year of production.

Davis also speculated that sexism was involved, stating, "Doubters also questioned whether a woman could gain the full confidence of a quorum of men from the federal government and two elite philanthropies, institutions whose wealth exceeded the gross national product of entire countries".

[42] After her appointment, Cooney hired Bob Davidson as her assistant; he was responsible for making agreements with approximately 180 public television stations to broadcast the new series.

[55] Early efforts included mobile viewing units that broadcast the show in the inner cities, in Appalachia, in Native American communities, and in migrant worker camps.

Starting in 2006, the Workshop expanded its programs by creating a series of PBS specials and DVDs largely concerning how military deployment affects the families of soldiers.

[51][60] A series of poor investments in video games, motion picture production, theme parks, and other business ventures hurt the organization financially.

[64] In 1998, for the first time in the series' history, they accepted funds from corporations for Sesame Street and its other programs,[65] a policy criticized by consumer advocate Ralph Nader.

[93] After Sesame Street's initial success, the CTW began to think about its survival beyond the development and first season of the show, since its funding sources were composed of organizations and institutions that tended to start projects, not sustain them.

Immediately after its premiere, Sesame Street gained attention from marketers,[94] so the Workshop explored sources such as licensing arrangements, publishing, and international sales, and became, as Cooney envisioned, a "multiple media institution".

[98] Licensing became the foundation of, as writer Louise Gikow stated, the Sesame Workshop endowment,[99] which had the potential to fund the organization and future productions and projects.

CBS executive Michael Dann was required to quit his job at that network due to a change of corporate policy preceding the so-called "rural purge"; upon his ouster, he became vice-president of the CTW and Cooney's assistant.

[note 2] Dann then began developing foreign versions of Sesame Street[106] by arranging what were eventually termed co-productions, or independent programs with their own sets, characters, and curriculum goals.

[109][note 3] The Workshop began pursuing funding from corporate sponsors in 1998; consumer advocate Ralph Nader urged parents to protest the move by boycotting the show.

[98] Working with Random House editor Jason Epstein, the CTW hired Christopher Cerf to manage Sesame Street's book publishing program.

[104] and as researcher Renee Cherow-O'Leary stated in 2001, "the print materials produced by CTW have been an enduring part of the legacy of Sesame Street".

Many Sesame Street songs were recorded by well-known artists such as Barbra Streisand, Lena Horne, Dizzy Gillespie, Paul Simon, and Jose Feliciano.

The CTW has chosen to take advantage of the contingent feedback inherent in interactive computer games by developing and creating educational software based upon the television series' content and curriculum.

[135] In 2008, Sesame Workshop began to offer clips and full-length episodes on the websites Hulu, YouTube, and iTunes, where "Word on the Street" segments became the most popular webcast.