Nietzsche found in classical Athenian tragedy an art form that transcended the pessimism and nihilism of a fundamentally meaningless world. The Greek spectators, by looking into the abyss of human suffering and affirming it, passionately and joyously affirmed the meaning of their own existence. They knew themselves to be infinitely more than petty individuals, finding self-affirmation not in another life, not in a world to come, but in the terror and ecstasy alike celebrated in the performance of tragedies.

Originally educated as a philologist, Nietzsche discusses the history of the tragic form and introduces an intellectual dichotomy between the Dionysian and the Apollonian (very loosely: reality as disordered and undifferentiated by forms versus reality as ordered and differentiated by forms). Nietzsche claims life always involves a struggle between these two elements, each battling for control over the existence of humanity. In Nietzsche's words, "Wherever the Dionysian prevailed, the Apollonian was checked and destroyed.... wherever the first Dionysian onslaught was successfully withstood, the authority and majesty of the Delphic god Apollo exhibited itself as more rigid and menacing than ever." And yet neither side ever prevails due to each containing the other in an eternal, natural check or balance.

Nietzsche argues that the tragedy of Ancient Greece was the highest form of art due to its mixture of both Apollonian and Dionysian elements into one seamless whole, allowing the spectator to experience the full spectrum of the human condition. The Dionysian element was to be found in the music of the chorus, while the Apollonian element was found in the dialogue which gave a concrete symbolism that balanced the Dionysian revelry. Basically, the Apollonian abstract forms were able to give shape to the passionate Dionysian experience.