Fom 1975 to 1978 Kate Crutchley was involved with Gay Sweatshop. In 1977 she formed Women's Project Company with Nancy Diuguid. The group was subsidised by the Arts Council to encourage women writers. One of their productions was Aid Thy Neighbour by Michelene Wandor. For a while Kate Crutchley was artistic director at the Writers' Theatre Company at Birmingham Arts Lab.

In 1980 she went to the Oval House in Kennington, south London as a freelance director and she directed the play Bohemian Rhapsody. In 1981 she took over as the programme director of the Oval House. In this role she was able to commission work provided that it was funded by the Arts Council or Greater London Arts. One of her first commisions was to ask (the heterosexual) Joyce Halliday to adapt Isobel Millar's cult lesbian novel Patience and Sarah. The lesbian and feminist theatre group Split Britches happened to be in London and were happy to perform the play at the Oval House.

In 1986 Kate Crutchley formed her own theatre company, Character Ladies, which performed at the Oval House but obtained funding from eslewhere. There were three directors: Kate Crutchley, Susan Hayes, and Dee Berwick. Their first play was Supporting Roles by Sandra Freeman in 1986. In 1987 Character Ladies put on their next production, Sappho and Aphrodite, by Karen Malpede. Kate Crutchley left the Oval House in 1991.