The origins of this work intended for a young audience date back to 1893: Hofmannsthal is planning to write a play, which he first entitles Die Landstraße des Lebens (the Highway of Life). He revises it in 1897, while writing his dissertation in Bad Fusch. He finishes the play in Verese, Italy. The new title, Das kleine Welttheater (the small theater of the world), is a reference to the playwriting of baroque theater but also to puppet theater, for which Hofmannsthal had a keen interest since his early days. Hofmannsthal later refuses that the play be produced, but the manuscripts clearly indicate that he wrote it for puppets, maybe under the influence of Maeterlinck Maurice. Das kleine Welttheater is published in two parts in the reviews Pan (1897) and Die Zukunft (1898). A note states that the scenes are taken from a puppet play. The first publication of the book dates back to 1903.

A poet comes out of his bath to walk on a bridge and enjoy the sunset. A gardener walks past him and mentions the glorious life he gave up in order to cultivate flowers. A young man relates his day spent hunting alone. Then comes a stranger, and after him a girl who is listening to a traveling singer. Night has now fallen. A group of three people arrives on the bridge: a madman, his servant, and a doctor. The madman is a young nobleman who had a life of abundance before devoting himself to solitude and to roaming. He meditates on the illusion of all things while leaning on the bannister. He tries to throw himself in the water, but his comrades prevent him from doing so.