The troupe emerges in Chicago as a collective of members from other improv and sketch performance groups. Founding members include Besser, Farahnakian, McKay, Roberts, Sanz, and Walsh. McKay says:
The first UCB show we ever did was called Virtual Reality. We would pluck someone out of the audience, and they would go with me and a cameraman in a car around the neighborhood—like we were doing sort of a Jack Kerouac drive around the country. Then we’d quickly edit the tape and show it to the audience ten minutes after we got back.