The purpose of this study is to examine the contribution that community-based theatre makes to community building with culturally diverse young people. The study also examines how community-based theatre, as part of the wider field of applied theatre, engages with and operates in the context of community. This is important due to an increasing need to build stronger culturally diverse communities. Certain global events threaten the stability of culturally diverse communities and in a time of high migration levels and increasingly diverse communities, approaches are needed that can respond to these tensions and that can also work to build inclusion. This thesis focuses on a practice-based research project that was conducted with culturally diverse young people in Melbourne, Australia throughout 2012. The project was established and delivered by the author and involved young people of refugee and migrant backgrounds participating in theatre workshops, devising and performing a theatre piece, and facilitating a peer-led theatre workshop. Action research and reflective practice were engaged as the methodology for the research as this approach provided a framework that corresponded to the participatory, youth-led nature of the practice. Qualitative data were collected through interviews with the participants, video footage of the theatre workshops, a reflective journal maintained by the author, and various materials that emerged through the project such as scripts, notes, and discussions. The data were analysed through a process of coding and categorising with patterns emerging to determine key areas of interest. These areas provided the foundation for the arguments within the thesis, resulting in three chapters which examine and discuss the findings from the research. In summary, these chapters can be described as examining the topics of “relationships”, “representation,” and “risk”. The first of these chapters considers the area of relationships in connection to community building by examining the research findings through a psychology framework. Key findings are that community-based theatre has the potential to reduce discrimination and build inclusive communities through several core areas including cooperation and interaction. It is also noted that the theatrical elements of narrative and embodied engagement enhanced these outcomes, by creating significant opportunities for participants to share information about culture, build trust, and develop connections among group members. The psychology framework offers explicit avenues for these results to be articulated, thus moving the topic of relationships away from the anecdotal and defining the ways in which community-based theatre can contribute to community building. The following chapter focuses on the concept of representation, examining the finding that the research project offered dialogical opportunities for participants to speak “about” and “to” community. In particular the study finds that the theatre-making process created a representational space whereby participants could explore and communicate issues relating to community and self. Furthermore, this led to moments of self-reflection and community dialogue, with the participants using theatrical elements such as narrative and character to define, interrogate, and reflect their reality. The final chapter of the three considers the nature of risk within community-based theatre practice. This chapter asks questions about the ethical considerations that emerged within the project relating to storytelling and the use of participants’ personal narratives that contain elements of trauma. The chapter discusses the risk associated with participants contributing personal narratives to a theatre-making process and notes that this risk must be carefully considered by practitioners. Within the specifics of this research there is also further risk around performing community narratives to community, particularly when community is portrayed in a negative light. The chapter considers the decisions made by the author within the context of the research project and further examines the steps that can be taken when approaching the concept of risk. It is hoped that this study will contribute to a greater understanding of community-based theatre as a community-building tool and that this in turn will assist in building and supporting healthy communities.