The town was formerly a railway junction. Furniture manufacturing grew into an important part of the local economy by the twentieth century.

The city's economy took an extensive turn when the Stratford Shakespeare Festival started in 1953. The annual festival still attracts many of theatre goers and tourists to the area. In the first season, the Canadian novelist and playwright Timothy Findley performed.

The world-famous festival takes place in four theatres all over the city: the Festival Theatre, the Avon Theatre, Tom Patterson Theatre and the Studio Theatre.