After a turn as a Polish violinist in the little-seen "Misplaced" (1989), Mitchell appeared in the 1990 Broadway staging of "Six Degrees of Separation" as the gay lover of the young imposter. The following season, he delivered a nice turn as the mysterious Dickon in the stage musical adaptation of "The Secret Garden". In Larry Kramer's autobiographical drama, "The Destiny of Me" (1992), Mitchell offered a brilliant turn as the young Ned Weeks (the hero of Kramer's "The Normal Heart"), as he comes to terms with his homosexuality. He went on to co-star as one of the lovers in "Hello Again" (1994), Michael John LaChiusa's chamber musical based on "La Ronde".
While on a plane flight in 1994, Mitchell struck up a conversation with the only other passenger not watching the in-flight film, composer Stephen Trask. They would later collaborate on what was to be the actor's most influential role -- the transsexual East German rock singer Hedwig of "Hedwig and the Angry Inch". But it would take them some three years to fully realize the project, during which Mitchell appeared in the short-lived Fox sitcom "Party Girl" and honed his directorial skills with stage productions. When "Hedwig" debuted in 1997, no one could have anticipated how successful it was to become. When it was re-staged the following year, "Hedwig" received mostly raves and Mitchell and company enjoyed a hit. He went on to play the role in the West Coast premiere of the show and then developed the material as a feature film at the Sundance Screenwriters Lab. When the film version premiered at the 2001 Sundance Film Festival, it proved a hot ticket and the movie took home the Audience Award as well as the directing award for Mitchell (who also recreated his stage role).