The Goodman was founded in 1925 as a tribute to the ChicagoplaywrightKenneth Sawyer Goodman, who died in the Great Influenza Pandemic in 1918. The theater was funded by Goodman's parents, Mr. and Mrs. William O. Goodman, who donated $250,000 to the Art Institute of Chicago to establish a professional repertory company and a school of drama at the School of the Art Institute of Chicago. The first theater was designed by architect Howard Van Doren Shaw, although its design was severely hampered by location restrictions resulting in poor acoustics and lack of space for scenery and effects. The opening ceremony on October 20, 1925 featured three of Kenneth Sawyer Goodman's plays: Back of the Yards, The Green Scarf, and The Game of Chess. Two nights later the theater presented its first public performance, John Galsworthy's The Forest. The company mainly performed student productions with the addition of professional players through to the 1950s. In 1969 under artistic director, John Reich, it finally became a fully professional company. In 1978, its drama school was taken over by DePaul University. In 2000, the company moved into its new building at 170 N. Dearborn in Chicago's theater district. The 171,000 s.f. project was designed by KPMB Architects, DLK Architecture Inc., McClier Corporation, associated architects. It has two fully modern auditoriums, named the Albert and the Owen, after two members of the Goodman family who continue to be major donors. In August, Associate Artistic Director Michael Maggio died and they renamed the Michael Merritt Award for young designers the Michael Maggio Emerging Designer Award in his honor.
With the production of Radio Golf in 2007, the Goodman became the first theater to mount a production of each of the ten plays in August Wilson's Pittsburgh cycle. The theater has presented A Christmas Carol annually in December since the 1970s. Other productions the Goodman has staged over the years include Hay Fever, Lady Windermere's Fan, The Little Foxes, You Can't Take it with You, Born Yesterday, Pal Joey, To Be Young, Gifted and Black, Guys and Dolls, Talley's Folly, A House Not Meant to Stand, A Soldier's Play, Fences, Sunday in the Park with George, The Visit, Dancing at Lughnasa, Arcadia, Floyd Collins, Hollywood Arms, Dinner with Friends, The Goat, or Who is Sylvia?, The Light in the Piazza, I Am My Own Wife, and Rabbit Hole.