Choose a color scheme. Pick neutral colors that will allow you to create desert scenes as well as ones with more lush vegetation. Identify secondary colors that will allow you to create interior scenes such as throne rooms, the insides of tents and temple rooms.
Drape the stage with cloth. Cut the neutral-colored cloth large enough so that it covers the puppet stage structure and is loose enough that you can pin different signs and set pieces to it for each story or show. Add a cloth with color along the top of the structure for holiday shows such as purple at Easter or red at Christmas.
Paint the set to represent scenery from the ancient world. Place the painted set behind the puppet show proscenium, or opening, for the puppets to move in front of. Alternatively, project scenes onto the proscenium and trace them or enlarge pictures and print them out as a backdrop.
Select set pieces that establish the biblical period and place. Match set pieces to the story such as a manger for the Christmas story, the Ark of the Covenant and walls for the story of Joshua in Jericho or a tree-lined street for the story of Zaccheus and the sycamore tree. Place these set pieces onto the puppet stage, making sure they are proportional to the puppets. Pick representational pieces to avoid cluttering up the small space available for the puppets.
Paint a sign using old-style lettering and a biblical motif. Mount the sign on the top of your puppet stage.