The work in the Studio was flourishing, particularly new writing by women including Fay Weldon. In the Main House, the policy of guiding young actors over several years as had been the norm in the days of Sir Barry Jackson, was no longer feasible. This was in a large part due to the financial incentives that television acting offered over work in the regional theatres. Already established actors would instead be cast into the lead roles, for example, Peter O'Toole in Man and Superman (1982) and Peter Ustinov in Beethoven's Tenth (1983)to draw in audiences.
However, in 1985, Derek Nicholls was appointed director of the Young Company, nine actors straight from drama school toured with The Snow Queen, Wuthering Heightsand Accidental Death of a Tourist. These successes were against the backdrop of an increasingly difficult financial situation, meaning it was necessary for the Rep management to explore sponsorship, co-productions and temporary closures.
In 1987, John Adams was made Artistic Director following Perry's departure. He was keen to make the best use of the huge stage in the Rep main house with elaborate set designs and the use of larger casts. He also developed the policy of "colour-blind" casting, where the racial and ethnic relationships and provenance of the play are ignored in terms of casting.
In 1988, the Studio became the temporary home for Kenneth Branagh's Renaissance Company and Birmingham was treated to guest directors such as Dame Judi Dench, Sir Derek Jacobi and Samanatha Bond amongst others. Community touring was also a huge success, culminating in Heartlanders (1989) which was a community play performed in the main house and a national tour of the Railway Children. The work of Gwenda Hughes directing educational projects had a direct impact on local people, for example, the "Worlds Apart" project was aimed at children with severe learning difficulties.