Documentary theatre is theatre that uses pre-existing documentary material (such as newspapers, government reports, interviews, journals, and correspondences) as source material for stories about real events and people, frequently without altering the text in performance. The genre typically includes or is referred to as verbatim theatre, investigative theatre, theatre of fact, theatre of witness, autobiographical theatre, and ethnodrama.

While fact-based drama has been traced back to ancient Greece and Phrynichus' production of The Capture of Miletus in 492 BC, contemporary documentary theatre is rooted in theatrical practices developed in Eastern Europe during the 1920s and 1930s. In the years after the Russian Revolution, the USSR's Department of Agitation and Propaganda employed theatre troupes known as the Blue Blouses (so called because they wore factory workers' overalls) to stage current events for the largely illiterate population. The Blue Blouses dramatized news items and current events through song, dance, and staging. By 1924 these performances were standardized into the form of the zhivaya gazeta, or living newspaper.

Meanwhile, in Germany, Erwin Piscator was experimenting with incorporating documentary film footage and other primary source material into his "mass spectacles" In 1925 he wrote In Spite of Everything, a piece derived entirely from contemporary political documents and often cited as the beginning of the first period of modern documentary drama. In this and other early works, Piscator sought to depict the "absolute truth". He focused on the presentation of factual material in montage and collage form rather than trying to express the internal lives of the characters.

Documentary theatre spread west during the 1930s. In England, the form was employed by left-leaning political theatre groups like the Unity Theatre, which presented both documentary and historical dramas in order to expose the truths of the common man, frequently combining fiction and reality to achieve truth. Unity Theatre's documentary shows focused on the "living newspaper" aesthetic of Eastern Europe. Their first piece, Busmen (1938), combined naturalistic dialogue with abstract and stylized design aesthetics culled from expressionist and constructivist genres.

In the United States, the form was adapted by Hallie Flanagan Davis and Morris Watson into the large-scale Living Newspapers of the Federal Theatre Project of President Franklin D. Roosevelt's administration. Initially conceived as an "animated newsreel", the form evolved into a distinct theatrical genre; practitioners used spectacle and vaudeville techniques in addition to agitprop and Piscatorian conventions to tackle issues such as labor, housing, and agriculture during the Great Depression. Often, they included characters such as Little Man and Loudspeaker to stand in and speak for and to the audience during the action, fusing fact with dramatic symbol and clarifying the narrative arc. These plays, like later iterations of documentary theatre, were frequently communally created, often by groups of newspaper writers and theatre artists. The end of the Federal Theatre Project in 1939 brought documentary theatre in the United States to a halt until the early 1960s.

While the documentary theatre of the 1930s stressed the involvement of the audience, much of the work of the 1960s into the 1970s was influenced by Bertolt Brecht's distancing of the audience, through aesthetic practices, in order to question dominant ideologies. The work of this era focused more intensely on new or alternative perspectives of historical events by restructuring the documents to raise questions about perceived reality. In Germany, these documentary plays focused mainly on the aftermath of Nazism and the genocide of the Holocaust. Many works drew from transcripts from tribunals, such as Heinar Kipphardt's In the Matter of J. Robert Oppenheimer and Peter Weiss's The Investigation.

In his essay "Notes on the Contemporary Theatre", Weiss details 14 elements of documentary theatre, stating that "the strength of the documentary theatre resides in its ability to arrange fragments of reality into a usable model", and that the artistic power of the genre comes from a partisan interpretation and presentation of factual material. He also identified many potential sources for documentary theatre, including

minutes of proceeding, files, letters, statistical tables, stock-exchange communiques, presentations of balance-sheets of banks and industrial undertakings, official commentaries, speeches, interviews, statements by well-known personalities, press, radio, photo, or film reporting of events and all the other media bearing witness to the present.