The earliest-surviving fragments of Sanskrit drama date from the 1st century CE. The Mahābhāṣya by Patañjali contains the earliest reference to what may have been the seeds of Sanskrit drama. This treatise on grammar from 140 BCE provides a feasible date for the beginnings of theatre in India.

Its drama is regarded as the highest achievement of Sanskrit literature. It utilised stock characters, such as the hero (nayaka), heroine (nayika), or clown (vidusaka). Actors may have specialised in a particular type. Kālidāsa in the 3rd-4th century CE, is arguably one of ancient India's greatest Sanskrit dramatist. Three famous romantic plays written by Kālidāsa are the Mālavikāgnimitram (Mālavikā and Agnimitra), Vikramorvashiiyam (Pertaining to Vikrama and Urvashi), and Abhijñānaśākuntalam (The Recognition of Shakuntala). The last was inspired by a story in the Mahabharata and is the most famous. It was the first to be translated into English and German. Śakuntalā (in English translation) influenced Goethe's Faust (1808–1832). The next great Indian dramatist was Bhavabhuti (c. 7th century CE). He is said to have written the following three plays: Malati-Madhava, Mahaviracharita and Uttar Ramacharita. Among these three, the last two cover between them the entire epic of Ramayana. The powerful Indian emperor Harsha (606-648) is credited with having written three plays: the comedy Ratnavali, Priyadarsika, and the Buddhist drama Nagananda. Other famous Sanskrit dramatists include Śhudraka, Bhasa, and Asvaghosa. Though numerous plays written by these playwrights are still available, little is known about the authors themselves.