Drama-in-Education workshops (DiE) emphasize on balancing between teacher’s delicate structuring and participants’ spontaneous exploration and creation in dramatic activities and thus can be a powerful liminoid space to scaffold and facilitate young people’s development. Still, more researches are needed to dig into and understand such a dynamic and complex process happening in the workshop. In this article, we presented the theoretical background of conceptualizing drama as a hybrid cultural-aesthetic form to identify its potential in educational guidance. The perspective of developmental cultural psychology was introduced to frame DiE practice as a catalytic process working on releasing and transforming participants’ developmental forces. The hierarchical levels of semiotic mediation in cultural psychology can help to capture participants’ affective and cognitive generalizations in semiotic forms and to perform a micro-genetic analysis of the flow of participants’ subjective experiences. We also provided a step-by-step analysis of a DiE practice working with young Chinese immigrants to illuminate our theoretical proposal.