Say Goodnight, Gracie takes place in and around Chicago. Morgan and Jimmy live in Glen Ellyn, a Chicago suburb, but Jimmy's interest in dancing and Morgan's interest in acting frequently draw them to the city. Deaver's familiarity with the Chicago theater world is apparent, because the theater scenes are highly believable. The families both live in relative affluence; there is always enough money to support Morgan and Jimmy during their frequent excursions into the city, and the parents seem intent on fostering the teen-agers' aspirations by providing them the material support as well as verbal encouragement to pursue their dreams.