Community musical theatre projects have played important roles in engaging young people of diverse ethnicities in multicultural and religious Malaysia to cross borders, deconstruct stereotypes, appreciate differences, and build interethnic peace. This essay provides insights into the strategies and dialogic approaches employed in two such community musical theatre projects that promote peace-building in Penang. The emphasis is on the making of musical theatre through participatory research, collaboration, ensemble work, and group discussions about alternative history, social relationships and cultural change. The projects also stress partnerships with the multiethnic stakeholders, communities, traditional artists, university students, and school teachers who are involved in the projects. Equally important is the creation of a safe space for intercultural dialogue, skill training, research, and assessments to take place; this a working space that allows for free and open participation, communication, play, and creative expressions for all participants.