Long before the 10th century when performances are first mentioned in the records, ancient Việt traditions such as sung storytelling, shamanistic propitiation and call-and-response dialogue songs had influenced the development of hát chèo (generally known in English as 'popular theatre'), a distinct theatrical art with clearly-defined characterisation and plot. Traditionally performed in Red River Delta villages during festivals and holidays, chèo was set to popular northern folk tunes and featured songs and declamation written in popular language, riddled with proverbs and sayings. Its witty stories always focused on the lives of common folk such as farmers, students and country girls, and if a mandarin appeared he was usually of low rank. Part of the abiding appeal of chèo was that while it taught traditional values such as filial devotion, good morals, justice, benevolence, courage and courtesy, it was always essentially satirical and anti-establishment in nature. From the earliest times its anonymous vernacular plays were used to expose the injustices of those in power and its tendency to side with the downtrodden and oppressed against the greedy mandarin or king did not always endear it to the royal court.

Over the centuries a number of the best-known chèo stories evolved into written plays such as the classics Quan Âm Thị Kính, Lưu Binh-Dương Lễ, Trương Viên, Chu Mãi Thần, Kim Nham and Từ Thức. Notwithstanding this trend, the typical chèo performance remained improvisational in character, defying the efforts of colonial-era spoken drama practitioners such as Nguyễn Đình Nghị to modify the traditional techniques of the genre by dividing plays into acts and scenes and introducing western-style scenery and settings.

Although it hails from and is performed almost exclusively in the north of the country, chèo is promoted today as a national art form. It is generally presented in accordance with conventions laid down in 1501 by theorist Lương Thế Vinh in both full-length or short (c 25-minute) pieces, accompanied by a small orchestra dominated by a large drum known as the chầu and typically incorporating a đàn nhị (two-stringed fiddle), a đàn nguyệt (moon-shaped lute), a đàn tranh (zither), and a địch (transverse flute). The orchestra sits to one side of the stage, separating the actors from the audience. Costumes and make-up are simple, in marked contrast to those of tuồng. Characterisation (which includes stock character types such as the drunk old man, the Confucian scholar, the coquette and the clown) has much in common with that of Italian Commedia dell'arte and interaction between the performers and the audience is always an important feature of the action.

In addition to restoring and performing ancient chèo classics, the Việt Nam Chèo Theatre also sponsors the writing of new works aimed at rural audiences, relating to issues of contemporary relevance such as natural resources management, drug abuse and HIV-AIDS education.

Unfortunately, like their colleagues from other branches of Vietnamese traditional theatre, chèo artists have seen their audiences decline significantly in recent years and many of the country's professional chèo companies have been obliged to diversify their activities into more commercial forms of entertainment in order to survive.