Twenty-five of the series' 27 episodes are each a retelling of a classic fairy tale, particularly one written by The Brothers Grimm, Charles Perrault, or Hans Christian Andersen.

The 27th and final episode is a reunion special of cast and crew, titled "Grimm Party", in which, in fairy tale style, they attend a gala in fancy dress.

The series, as a live-action adaptation, was notable for featuring a number of Hollywood actors and famous celebrities portraying the costumed characters, and also utilized filming by well-known directors.

Faerie Tale Theatre was followed by three other short anthology series also produced by Duvall, including Tall Tales and Legends, which follows a theme similar to the latter, with a focus on American folklore, Nightmare Classics (4 produced of the intended 6 episodes), aimed at an older audience, and Bedtime Stories (12 episodes).

Many of the episodes were produced by Fred Fuchs, in association with Duvall, with the screenplays written by Rod Ash, Mark Curtiss, Maryedith Burrell and Robert C. Jones.

Episodes were directed by Francis Ford Coppola, Ivan Passer, Emile Ardolino, and Tim Burton, as well as other famous Hollywood directors.