Townsend's work in theatre includes: Remember This, Guys and Dolls, Phedre and Happy Now? at the National Theatre, London; The Alice Trilogy, Shining City (for which he won the Irish Times Best Actor Award), Under the Blue Sky, The Weir and Tribes at the Royal Court, London; The Wake, Trinity for Two and Sacred Mysteries at the Abbey Theatre, Dublin; The Gingerbread Mix-up at St Andrews Lane, Dublin; Prayers of Sherkin at the Old Vic, London; Someone Who'll Watch Over Me at West Yorkshire Playhouse, Leeds; The Plough and the Stars at the Young Vic, London; Democracy at the Bush Theatre, London; Speed-the-Plow for Project Arts Centre, Dublin; Saint Oscar for Field Day Theatre Company, Derry; Sexual Perversity in Chicago, The Caucasian Chalk Circle, The Country Wife, Nightshade and The White Devil for Rough Magic, Dublin; Who Shall Be Happy...? for Mad Cow Productions, Belfast, London and tour; and Art in the West End.