Born in the Depression, the Peninsula's first theatre company, Palo Alto Players, began when a group of one hundred like-minded citizens gathered together to create a theatre group for the community. Initially, productions were at a makeshift performance space in the Palo Alto Community House adjacent to the train station (now MacArthur Park Restaurant). The Players soon gained a patron in their audience member Lucie Stern, who donated funds to give them a home, the Palo Alto Community Theatre, now a part of the city-owned Lucie Stern Community Center, at Rinconada Park.

The same year it settled into its new home (1934), the organization was incorporated as the tax-exempt, nonprofit Palo Alto Community Players, Inc. The company was associated with Palo Alto's Parks and Recreation Department and was fully subsidized by the City of Palo Alto which provided all funds to meet operational costs, including its professional staffing. World War II found the company producing "defense plays" for the purposes of civil defense information and, of course, entertainment. The Players also traveled to military camps throughout the Bay Area to entertain the troops. In 1948, the Players created the Palo Alto Teen Players, a group that lasted through the late sixties. Musical productions were not added as a regular part of Players' programming until the 1950s.

In 1974, the Community Players dissolved their ties with the Parks and Recreation Department, choosing to become an independent company. However, since that time, the City of Palo Alto has continued to support the Palo Alto Players with performance, rehearsal and shop space at the city-owned Community Theater (also known as the Lucie Stern Theater).

In 1986, under the leadership of Executive Director Peter Bliznick, the Players received by charitable donation the historic Fox Theater in downtown Redwood City. This opened up a new community performance venue in addition to the one enjoyed by the revitalized Palo Alto program. A new branch of the company was created-Peninsula Center Stage (PCS)-which began with three seasons of open-air performances called Shakespeare-at-Woodside (1988-1990). In 1991, and in addition to its programming in Palo Alto, PAP-PCS began mounting full seasons of musical productions to standing room only audiences at the Fox. To help meet the financial challenges of the future and to ensure that the focus of the company would remain production and not theater restoration, the old Fox building was sold in 1998. In March 2000, Peninsula Center Stage productions ceased in Redwood City enabling the organization to concentrate fully on producing high-quality productions with its venerable Palo Alto Players program.

Quite a few participants in Palo Alto Players have gone on to make important contributions in education and the film industry, including Danny Glover (Of Mice and Men, PAP 1976), two-time Oscar winning Midnight Cowboy and Coming Home screenwriter Waldo Salt (Mr. Pim Passes By, PAP 1935) and 1991 Oscar recipient, Jack Palance (The Philadelphia Story, PAP 1946). In fact, the roots of many of the Bay Area's theatre companies, including many of its artists and artistic leaders, can be traced back to the excellence in theatre of the Palo Alto Players, an excellence that has been the hallmark of the Players since 1931.