The Aboriginal Islander Dance Theatre (AIDT) was set up as an ongoing performing group in 1976. It was originally made up of young people participating in Careers in Dance, a full-time dance training course for Aboriginal and Islander students initiated in 1975 by the Aboriginal Arts Board and led by founding teacher Carole Johnson. The group developed to include teachers, graduate students and advanced students of what eventually became NAISDA (National Aboriginal and Islander Skills Development Association) College, and frequently invited guest artists to perform with it. AIDT became a professional performing group in 1988 and was launched as a company in 1991 under the artistic directorship of Raymond Blanco.

The AIDT repertoire was based on traditional and contemporary dance with its early promotional material stressing the modern Aboriginal/Islander identity. Indigenous tutors such as Janet Munyarryun, Veronica Munyarryun, Larry Gurruwiwi, Michael Warusam and Cedric Waia taught traditional choreography and Dorothea Randall and Rosalyn Watson played an important role in contributing Indigenous choreography to end of year productions in the 1980s. Over the years other Indigenous choreographers would include David Gulpilil, Dell Sebasio, Stephen Page and Bernadette Walong. Non-Indigenous choreographers who worked with the company include Ronne Arnold, Robina Beard, Elisabeth Burke and Pierre Thibaudeau, Kate Champion, Kai Tai Chan, Karen Kerkhoven, Chrissie Koltai, Paul Saliba and Cheryl Stock. From 1991 AIDT repertoire included Jedda (1991), Maralji (1991), Yirrkala (1991), Colours (1993), Gelam (1993), On the Spot (1994), and Sanctum (1994).

AIDT's first international tour was in 1977 participating in the African and Black World Festival of Arts and Culture in Nigeria. Its first international tour as a larger company was in 1988 when AIDT performed in Finland and Germany. Later tours took the dancers throughout Australia and internationally to Asia, Europe and the Americas.