She began her theatrical career as a producer, director, and actress in the late 1940s. Her first work as a producer was Bertolt Brecht's The Private Life of the Master Race, adapted by Eric Bentley. The production opened in 1956 and received one of the first Village Voice OBIE awards.
Michaels and her husband, designer-painter Harry Baum, opened and owned the St. Marks Playhouse. There, they presented such works as Deep are the Roots, Hop, Signor, Jean Genet's The Blacks: A Clown Show, and LeRoi Jones' The Slave/The Toilet. Starting in 1969, the venue became the home of the Negro Ensemble Company for nine seasons.
In the 1970s, Michaels initiated the Open Space Theatre Experiment, a non-profit company that produced shows in Soho and later at the St. Mark's Playhouse. In Soho, she created a performance space in a converted hat factory at 64 Wooster Street (now the Ohio Theatre). Under her artistic direction, Open Space presented festivals of new work, including "The World Through Women's Eyes," as well as such productions as The Whale Show and James Lapine's Photograph.
In the early 1980s, Open Space began producing full time at the St. Mark's Playhouse, offering innovative revivals of plays by Ibsen, Strindberg, and Camus along with new works. In recent years, Michaels lectured at NYU on the history of the Off-Off Broadway movement.
Michaels is survived by a brother, a niece and nephew. Plans for a memorial celebration are underway.