The use of a retractable plateau allows for the creation of new places in the woods, and also makes the woods seem like an ever-shifting place, where identity is continually disturbed and questioned. The impression is as if the viewer shifts suddenly from a community center theater production for children to the darkness of Les Miserables, another famous musical with a moving set. The woods are not entirely a place of freedom, however. Set designer Aaron Kennedy makes use of multiple layers within the context of the scenery to convey different 'realms.' For example, Rapunzel, the adopted child of the witch, is kept high in a tower, far from the other characters. Until Rapunzel is cast out from the tower, she can only interact with others in a limited fashion, through her singing and letting down her glowing, golden hair. A lighted knothole represents the spirit of Cinderella's mother, who communicates with her daughter from the dead and helps her, until the forest is destroyed in the second act by the fall of a dead giant, represented by a giant foot.

During the second act, the interactions between the characters are even less controlled than those of the first act. The act begins with the three row houses, but these storybook dwellings are destroyed by the shaking of the earth. This symbolizes how the characters no longer interact with one another's stories in a limited way: they must...

Although this does not solve their problems, the set is skillfully designed in its depth and presentation to allow the characters to interact in such a manner. The audience does not notice the 'framed' nature of the entire set, even the woods, until the fourth wall is broken entirely, and the narrator, standing to the side, becomes an unwitting participant in the action.
The play begins garishly, and ends somberly but hopefully. Although the song "Into the Woods" occurs over and over again, the ending of the characters in the woods, repeating the song, is conducted on an almost entirely bare stage. The lighting is bright to indicate the clarity of the surviving character's thoughts, that "Children will listen," even if they do not always obey. The leitmotif, or repeating theme of the enclosed houses, is no more, and the cast faces the audience unafraid, having broken the fourth wall and ridden themselves of the formulaic story-telling of the narrator for good.