The New York State Theater Institute (NYSTI) was founded in 1974 by legislation passed by the New York State Legislature. The Institute was originally named the Empire State Youth Theater Institution and was under the guardianship of the State University of New York. The founding director was Patricia B. Snyder. In 1982, the organization was renamed the Empire State Institute for the Performing Arts after a partnership was established with the Empire State Plaza Performing Arts Center, also known as “the Egg.” This partnership was dissolved in 1992 after a dispute. The New York State Legislature reconstituted it as a public benefit corporation. As a result, the majority of its budget came from state aid. It was also at this time, the name was changed to the New York State Theater Institute. NYSTI moved its administrative offices to Troy, NY and performances were held at the Schacht Fine Arts Center on the Russell Sage College campus. Ms. Snyder continued to serve as the director.

NYSTI focused on bringing professional theater programs to children. In addition to being a popular destination for field trips, it also offered an extensive range of educational programs including pre-show intros and study guides. NYSTI also had a successful internship program for high school, college and graduate students. Additionally, it offered traveling shows and developed new productions geared towards school age children.

In the early 2000s, New York State initiated reform efforts to quasi-government and state entities. NYSTI was a part of these efforts as it received the majority of its budget from state aid. Its budget was dramatically reduced as a result. Concurrently, an investigation into NYSTI was ordered by the Executive branch of the New York State government. It was carried out by the New York State Inspector’s Office and a report was issued in April 2010. This report charged the institute was bursting with corruption, mismanagement, nepotism and possibly illegal conduct. It also claimed the Producing Director, Patricia Snyder, improperly used state money. Further controversy was created when Governor Patterson proposed the state eliminate the institute’s funding. Despite private fundraising efforts to save NYSTI, its Board of Directors voted to close the institution effective December 31, 2010.