quality:correction, linguistic:paraphrasing
1960s

In 1960, The Fantasticks was first produced off-Broadway. This intimate allegorical show would quietly run for over 40 years at the Sullivan Street Theatre in Greenwich Village, becoming by far the longest-running musical in history. Its authors produced other innovative works in the 1960s, such as Celebration and I Do! I Do!, the first two-character Broadway musical. The 1960s would see a number of blockbusters, like Fiddler on the Roof (1964; 3,242 performances), Hello, Dolly! (1964; 2,844 performances), Funny Girl (1964; 1,348 performances) and Man of La Mancha (1965; 2,328 performances), and some more risqué pieces like Cabaret, before ending with the emergence of the rock musical. In Britain, Oliver! (1960) ran for 2,618 performances, but the long-run champion of the decade was The Black and White Minstrel Show (1962), which played for 4,344 performances. Two men had considerable impact on musical theatre history beginning in this decade: Stephen Sondheim and Jerry Herman.

The first project for which Sondheim wrote both music and lyrics was A Funny Thing Happened on the Way to the Forum (1962, 964 performances), with a book based on the works of Plautus by Burt Shevelove and Larry Gelbart, starring Zero Mostel. Sondheim moved the musical beyond its concentration on the romantic plots typical of earlier eras; his work tended to be darker, exploring the grittier sides of life both present and past. Other early Sondheim works include Anyone Can Whistle (1964, which ran only nine performances, despite having stars Lee Remick and Angela Lansbury), and the successful Company (1970), Follies (1971) and A Little Night Music (1973). Later, Sondheim found inspiration in unlikely sources: the opening of Japan to Western trade for Pacific Overtures (1976), a legendary murderous barber seeking revenge in the Industrial Age of London for Sweeney Todd (1979), the paintings of Georges Seurat for Sunday in the Park with George (1984), fairy tales for Into the Woods (1987), and a collection of presidential assassins in Assassins (1990).

While some critics have argued that some of Sondheim's musicals lack commercial appeal, others have praised their lyrical sophistication and musical complexity, as well as the interplay of lyrics and music in his shows. Some of Sondheim's notable innovations include a show presented in reverse (Merrily We Roll Along) and the above-mentioned Anyone Can Whistle, in which the first act ends with the cast informing the audience that they are mad.

Jerry Herman played a significant role in American musical theatre, beginning with his first Broadway production, Milk and Honey (1961, 563 performances), about the founding of the state of Israel, and continuing with the blockbuster hits Hello, Dolly! (1964, 2,844 performances), Mame (1966, 1,508 performances), and La Cage aux Folles (1983, 1,761 performances). Even his less successful shows like Dear World (1969) and Mack and Mabel (1974) have had memorable scores (Mack and Mabel was later reworked into a London hit). Writing both words and music, many of Herman's show tunes have become popular standards, including " Hello, Dolly! ", "We Need a Little Christmas", "I Am What I Am", "Mame", "The Best of Times", "Before the Parade Passes By", "Put On Your Sunday Clothes", "It Only Takes a Moment", "Bosom Buddies" and "I Won't Send Roses", recorded by such artists as Louis Armstrong, Eydie Gormé, Barbra Streisand, Petula Clark and Bernadette Peters. Herman's songbook has been the subject of two popular musical revues, Jerry's Girls (Broadway, 1985) and Showtune (off-Broadway, 2003).

The musical started to diverge from the relatively narrow confines of the 1950s. Rock music would be used in several Broadway musicals, beginning with Hair, which featured not only rock music but also nudity and controversial opinions about the Vietnam War, race relations and other social issues.