Abstract: A self-contained watch and play activity kit is disclosed which includes a puppet theater having a front and two sides. The front includes a transparent portion through which the interior of the theater is visible. The sides are foldable about weakened first fold lines parallel to the front to form an enclosed theater container in which a central space is provided. A removable insert is sized to be snugly received in the central space of the folded theater container. The insert includes a video cassette holder. The insert further forms a compartment with the folded theater container in which various props for the theater and elements of the kit are stored. The sides also include weakened second fold lines so that the rearward portions of the sides are folded to form a back of the theater. In order to provide access to the inside of the theater, removable panels are located in each side.