The Magic Theatre's association with Sam Shepard elevated it from a local theater company to a nationally significant institution. Shepard served as the company's playwright-in-residence and premiered several major works there, including Buried Child, which won the Pulitzer Prize for Drama in 1979. The relationship between playwright and theater company was symbiotic: Shepard got a stage willing to take risks on his challenging, genre-defying work, and the Magic Theatre got access to one of the most important voices in American drama.

The Magic Theatre is housed at the Fort Mason Center, a former Army post on the northern waterfront that was converted into a cultural center after the military left. The location, overlooking the bay with views of Alcatraz and the Golden Gate, gives the theater an atmosphere unlike any other in American drama. The fort's historic buildings house multiple cultural organizations, creating a cluster of artistic activity in a setting that combines military architecture with waterfront scenery.

The Magic Theatre's mission has always centered on new work. The company has premiered plays by dozens of American playwrights over its decades of operation, maintaining a commitment to developing original voices rather than reviving established classics. This focus on the new makes it a perpetual risk-taker in a field where revivals are financially safer. The theater continues to operate at Fort Mason, still betting on playwrights whose best work has not yet been written.