Co-founded by Anne Kraft and Jean Rahner, the Limelight Theatre staged its first production, I Ought To Be in Pictures, on August 28, 1992, in the Monson Bayfront Inn. It provided entertainment at this location for almost two years. In 1994, the Theatre achieved not-for-profit status as a 501(c)3 organization, and it continued to offer productions for a number of years at a wide variety of local venues, including the Art Association, churches, the St. Augustine Amphitheatre, Marineland, Flagler College and a small rented building on U.S. Highway 1.

In 2001, through a generous grant from the Joukowsky Family Foundation, the Limelight purchased a 10,000 square foot building at 11 Old Mission Avenue, converted it to a 125- seat theater and moved into its first permanent home.

The building needed significant improvements, and in 2006, the Limelight applied for and received a Cultural Facilities Grant of $398,000 from the State of Florida. The money was used for capital improvements including a new roof, new air-conditioning, heating, sound and lighting systems, lobby and restroom renovations and the addition of a studio theatre, now known as the Koger-Gamache Studio Theatre.