With a capacity of 20,000 seats approximately, it counts among the largest ancient theatres in Greece. Nestling in the southeastern side of the castle hill, so as to be linked to the agora, it overlooked the ancient city and was visible from the Argolic gulf. Preexisting small sanctuaries interspersed on the same spot, including those of the Dioskouroi and Zeus Eubouleus, remained untouched during construction of the monument. Built during the Hellenistic period, in the early third century BC, it replaced the oldest theatre of the town, which lied about 100m to the south and was built in the fifth century BC, probably in order to host music and drama contests during the Panhellenic Nemean games, which were then transferred definitively to the town of Argos from the sanctuary of Zeus in Nemea; almost simultaneously, the Heraian games were also transferred to Argos. According to evidence, the oldest Nemean competition taking place in the theatre of Argos in 205 BC involved guitar players and singers. The monument also hosted political conferences, such as the regular Sessions of the Achaian Sympoliteia (League) during the second century BC.

The huge cavea of the theatre, for the greatest part hewn from the rock, is divided by two diazomata (landings) into three horizontal sections and by staircases into four cunei, corresponding to the tribes of Argos. The central section contains 83 rows of seats carved into the rock; additional tiers on both sides are fixed on artificial dykes retained by isodomic walls of unequal measure. Initially circular (26m in diameter), the orchestra was also to the largest part hewn from the rock; its centre featured two embossed reliefs, a circle and two tangent lines for the guidance of the chorus: a circular movement for the dithyrambs and a straight movement in tragedies and comedies. The ?Charonian stairway?, an underground passage that linked the orchestra to the locker rooms, facilitated the appearance of the dead and the chthonic deities during performances. The initial scenic building was built of elaborate limestone. It consisted of the proscenium or front of scene (24.40 x 2.