Drawing on literary, epigraphical, and archaeological material, this article addresses the interrelation of the performance context, physical form, and aesthetic of ancient Greek puppetry. Puppeteers performed in a variety of contexts, which included processions and public theaters. During religious festivals, they were hired to supplement competitions in drama and music. I classify ancient Greek puppetry into two main types: the phallic puppets used in religious processions in the Eastern Mediterranean, and small-scale puppetry, which was performed in theaters and possibly also in private contexts. I contend that puppetry was not universally considered an insignificant art but was, rather, an important part of the performance culture of the ancient Mediterranean world. The inclusion of puppetry in religious festivals suggests a positive relationship with this art; reactions to puppetry, from laughter to thauma (wonder), align with the aims of the festivals which hosted such performances.