Herbert Heron found a bowl-shaped piece of land and asked Carmel Development Company co-founder James Devendorf about it. Devendorf let the group use it free and helped clear the land and build a wooden stage. From 1910 local residents performed plays by local writers, along with classics and Shakespeare. Mary Austin, another early playwright, is credited with suggesting an outdoor stage.
The Arts and Crafts Club bought the land and ran the theater until it went into debt during the Depression. In 1937 the club deeded it to the city to qualify for Works Progress Administration money, and the WPA rebuilt it and added an indoor theater below the stage. It reopened in 1942 as the Carmel Shakespeare Festival.
Since 2022 Pacific Repertory Theatre (PacRep) has managed the site, which also hosts films, concerts and civic events.