The reforms in the Ottoman Empire aiming at the modernization of the state (1839–76) and the arrival of the schools of the Alliance Israélite Universelle as of the 1860s led to significant changes in the life of the Ottoman Sephardi community. As a result of westernization, the last third of the nineteenth century witnessed the emergence of new forms of cultural production: press, belles lettres, and theater. They had no counterparts in previous epochs and were imported from Europe through the influence of the Alliance Israélite Universelle and the local westernizers. All of them took root and developed in their own way in the local Sephardi culture. As its title shows, this paper will deal with Sephardi theater as a sociocultural institution rather than with its aesthetic aspects which, as will be demonstrated, were not of great importance even to its creators. The paper examines the factors that brought Sephardi Theater into existence, as well as its functions in the Sephardi community.