[4][5] In the following year, the government merged it with the newly founded school, and thus NSD was established in April 1959 under the auspices of Sangeet Natak Akademi.

During his tenure as the director of the institution, Ebrahim Alkazi (1962–1977), not just overhauled the syllabus, but also had the students dig and build platforms for a theatre in the backyard of a rented Kailash Colony house, where NSD had moved.

In 2008, the institution celebrated its golden jubilee at its annual theatre festival, Bharat Rang Mahotsav, with a gathering of its alumni from all over the country,[8] the festival's satellite edition in Mumbai showcased plays of NSD graduates, including Ratan Thiyam's Prologue, Bansi Kaul (Aranyadhipati Tantiya), Neelam Mansingh Chowdhury (The Suit), Sanjay Upadhyay (Harsingar), Baharul Islam (Akash), Mohan Maharishi (Dear Bapu) and M K Raina (Stay Yet Awhile).

[14][15] However, in 2010 the NSD Society asked for the deemed university status to be revoked since "[it] could undermine the professional training, autonomy, and flexibility required in the creative fields such as theatre."

The company regularly performs plays for school and adult audiences alike, and has its own yearly theatre festivals, 'Jashn-e-Bachpan' and Bal Sangam.

The school has been imparting training and creating plays with theatre practitioners all throughout the country through a series of well-planned theatrical workshops that take into account the individual demands of each location.

The school also builds contact with a significant number of theatrical groups and organizations that are performing good work in the regions through collaborative projects through this programme.

Once the productions were completed, participants were given the opportunity to present ten shows in various sections of the region in order to build self-confidence, a variety of experience, and audience engagement.

The plays in the Poorvottar Natya Samaroh covered a wide range of topics, including romance, social issues such as caste and gender, exploitation in a feudal system, survival and hope in a conflict-torn societal milieu, philosophical ideas, and resistance.

[21] NSD has had fourteen directors since its establishment in 1959:[24] In August 2018, a woman student alleged molestation[25] – that she was inappropriately touched by National School of Drama's guest professor Suresh Shetty during the entrance workshop.