The article deals with Arthur Schnitzler’s one act drama “Der grüne Kakadu”. Numerous questions were raised in this small in volume play thanks to the genre of one act play in which the dialogue is the leading ground of dramatic action as well as theatre within a theatre structure. The structural dramatic element is the story lines parallelism, the most important problems of Arthur Schnitzler’s work such as love and death, reality and illusion, truth and lie, play and actuality are covered from various perspectives. It has been proved that the confusion of reality and illusion helps to bring the features of characters to light – they represent only the theatrical discourse and are not able to realise their potential in real life. The aesthetic enjoyment of playing gets the negative connotation and makes for self-delusion and inability to find the place in real life. Thanks to translocation of real and theatrical the distance between the stage and audience are also reduced resulting in the reception problem proceeded by the offstage spectator as the main subject. The following approach to the creation of a dramatic work has become more and more relevant in the literature of the 20th century.