This paper proposes a critical reading of Pier Paolo Pasolini’s tragedy Calderón against the background of the author’s contemporaneous collaboration with and subsequent abrogation of the members of the Living Theatre of New York. First, his tragedies and other works of the so-called "second Pasolini" period are contextualized by historicizing his dialogue with the Living Theatre, engaged writers like Ginsberg, and representatives of the American New Left. Second, a metatextual approach is taken in contrasting Pasolini’s theatrical manifesto (1968) with that of the Living Theatre. A productive theoretical framework (de Certeau, Lefebvre) is proposed in order to make sense of the seminal moment that was 1968 to both Pasolini’s worldview and oeuvre. Third, these insights are put to the test in a close reading and interpretation of Pasolini’s Calderón. The baseline of the present essay is that the tragedies, and Calderón in particular, are to be reconsidered as key texts for an understanding of both Pasolini’s political position with regards to the events of 1968, and his engaged literary aesthetic of the later years (e.g. Petrolio). As such, the less canonical position of the theatre within Pasolini’s late oeuvre is revisited.