From 1594 to 1608, Shakespeare was fully involved in the London theater world. In addition to his duties as a stockholder and actor in the Lord Chamberlain's Men, he wrote an average of almost two plays a year for his company. During much of this period, Shakespeare ranked as London's most popular playwright, based on the number of times his plays were performed and published. But his reputation was largely that of a popular playwright, and not of a writer of unequaled genius. Few people gave him the praise that later generations heaped on him. An exception was the English clergyman and schoolmaster Francis Meres. 

During the years Shakespeare performed with the Chamberlain's Men, before their purchase of the Globe in 1599, they played primarily at the well-established theatres like the Swan, the Curtain, and the Theatre. The troupe would also give regular performances before Elizabeth I and her court, and tour the surrounding areas of London. Some important events in Shakespeare's personal life also take place during this time period. The Shakespeares finally received a coat of arms 1596 (see "Shakespeare's Parents" for more information on the coat-of-arms), and on August 11 of the same year, Shakespeare's son, Hamnet, died at the age of eleven. Shakespeare no doubt returned to Stratford for the burial, although we have no documented proof. In 1597, Shakespeare purchased the second largest house in Stratford: New Place. The house stood at the corner of Chapel Lane and Chapel Street, north of the Guild Chapel and right across from the very school he attended in his youth. He bought it from William Underhill for the low price of 60 pounds, and below is the actual deed (translated from the original Latin) transferring New Place from Underhill to Shakespeare on May 4, 1597:

Between William Shakespeare, complainant, and William Underhill, deforciant [wrongful occupier, supposed by the legal fiction on which the fine method of transfer was based to be keeping the complainant out of his rightful property], concerning one dwelling house, two barns, and two gardens with their appurtenances in Stratford-on-Avon, in regard to which a plea of agreement was broached in the same court: Namely, that the said William Underhill acknowledged the said tenements with their appurtenances to be the right of W. Shakespeare as being those which the same William Shakespeare has by gift of the said W. U., and remitted and waived claim to them from himself and his heirs to the said W.S. and his heirs forever....and agreement the same W.S. has given the foresaid W./U. sixty pounds sterling. (Brooke 21)

Many theorize that Shakespeare renewed his interest in Stratford only after the death of Hamnet and that, for the many years he was away in London, he neglected his family back home. However, it is just as likely that he made frequent yet unrecorded trips to Stratford while he was trying to find success in London. Shakespeare returned to the theatre in 1594, and became a leading member of the Lord Chamberlain's Men, formally known as Lord Strange's Men. The manuscript accounts of the treasurer of the royal chamber in the public records office tells us the following:

 

To William Kempe, William Shakespeare, and Richard Burbage, servants to the Lord Chamberlain, upon the council's warrent dated at Whitehall xv die Marcij 1594 for two several comedies or interludes showed by them before her Majesty in Christmas time last past, viz; upon St. Stephan's day and Innocent's day, xiiij li. vj s. viij d. and by way of her Majesty's reward...

This is proof that Shakespeare had performed with the Chamberlain's Men before Elizabeth I on several occasions. As payment for their performance the actors each received 10 pounds. During his time with the Chamberlain's Men Shakespeare wrote many plays, including Romeo and Juliet, Richard II, King John, and Love's Labour's Lost. As G.E. Bentley points out in Shakespeare and the Theatre, Shakespeare had by this time become immersed in his roles as actor and writer. He was "more completely and more continuously involved in theatres and acting companies than any other Elizabethan dramatist. [Shakespeare is] "the only one known who not only wrote plays for his company, acted in the plays, and shared the profits, but who was also one of the housekeepers who owned the building. For seventeen years he was one of the owners of the Globe theatre and for eight years he was one of the housekeepers of the company's second theatre, the Blackfriars, as well"

 

In 1598, Meres wrote Palladis Tamia: Wit's Treasury, a book that has become an important source of information about Shakespeare's career. In this book, Meres said of Shakespeare: "As Plautus and Seneca are accounted the best for Comedy and Tragedy among the Latins: so Shakespeare among the English is the most excellent in both kinds for the stage." Although Meres' praise did not represent everyone's opinion, it indicates that Shakespeare had become an established writer by at least the late 1590's. And he had not yet written most of his great tragedies, such as Hamlet, Othello, King Lear, and Macbeth. 

By the late 1590's, Shakespeare had not only become an established writer, but he had also become prosperous. n 1596 Shakespeare's father was granted a coat-of-arms, and it is likely that in this matter the dramatist took the initiative with the College of Arms in London.

On his father's death in 1601, he inherited the arms and the right to style himself a gentleman, even though, at the time, actors were generally regarded as rogues and vagabonds. In 1597, he purchased New Place, one of the two largest houses in Stratford. Shakespeare obviously remained a Stratford man at heart in spite of his busy, successful life in London. Records of business dealings and of minor lawsuits reveal that he preferred to invest most of his money in Stratford rather than in London. 

Shakespeare's success in the London theatres made him wealthy and in 1597 he bought New Place, one of the largest houses in Stratford. Although his professional career was spent in London, he maintained close links with his native town. Further property investments in Stratford followed, including the purchase of 107 acres of land in 1602.

In 1598, the author of a book on the arts, Francis Meres, described Shakespeare as the best contemporary dramatist and mentioned twelve of his plays, including A Midsummer Night's Dream, The Merchant of Venice, Richard II and Henry IV, all of which date from the mid- to late-1590s.

Shakespeare's success is apparent when studied against other playwrights of this age. His company was the most successful in London in his day. He had plays published and sold in octavo editions, or "penny-copies" to the more literate of his audiences. It is noted that never before had a playwright enjoyed sufficient acclaim to see his works published and sold as popular literature in the midst of his career. While Shakespeare could not be accounted wealthy, by London standards, his success allowed him to purchase New House and retire in comfort to Stratford in 1611.