Written by Tony Briggs, it told the story of four Aboriginal women who went to Vietnam in 1968 and found fame singing to the troops. Briggs based it on his own mother, Laurel Robinson, and aunt, Lois Peeler, who had done the same thing. And it became a huge hit.
For Blair, it marked the beginning of a journey that would take him around the world, from shooting in Australia and Vietnam to promoting the film in Cannes, America and the UK.
And yet the Aboriginal artist, who studied film in New York, hadn't realised the play's potential. "At the time I had to pay the bills in Sydney, so I didn't see that [potential], to be honest."
Instead, Blair divided his time between acting, writing and directing, contributing to several Australian television series (Double Trouble and Dead Gorgeous) as director and appearing on stage and in films including X: Night of Vengeance.
Briggs, meanwhile, developed the project as a film and eventually got Blair on board to direct what would be his first feature.
The ensuing film, a feel-good tale of triumph against the odds that also examines Aboriginal rights, has become the most successful Australian film of 2012 and received a 10-minute standing ovation after its Cannes world premiere.
It now looks set to make stars of its leading quartet, Deborah Mailman, Miranda Tapsell, Jessica Mauboy and Shari Sebbens, as well as heighten the profile of Chris O'Dowd, who plays their Irish manager.
For Blair it's a dream come true. "It's great to have been able to represent the Aboriginal people and give something joyful and beautiful to the world," he said on the eve of the film's debut at the London Film Festival.
And a lot of work went into getting it right. First, with casting. "We saw between 120 and 150 ladies and indigenous women that could sing, act and dance. And we went everywhere before nailing it down to three Darwin girls and a Mount Isa lady."
Then there was balancing the film's feel-good elements with the more serious issues, which involved taking creative licence.
The original Sapphires comprised of just three members (including Beverley Briggs), only two of whom went to Vietnam, while there was no romance between the eldest sister (Mailman) and her manager (O'Dowd) – although Blair notes there was one in the family's history a generation earlier.
"It's funny how things come full circle because there was a white Irish uncle who, back in the '60s, married this Aboriginal woman and they had one of the first pubs in Port Melbourne. They were a little bit of a force to be reckoned with."
The inclusion of an extra Sapphire, in Sebbens's Kay, also offered the chance to look into Australia's stolen generation, which saw Aboriginal children who looked "white" enough to be integrated into "polite society" taken from their mothers. But Blair wanted audiences to have a good time, first and foremost.
"Tone was something we [co-writers Briggs and Keith Thompson] paid close attention to. We wanted to say that in 1968 Aboriginal people did participate. These are four females that had the same wants and needs as non-indigenous females. But we didn't want to be [too] heavy with that.
"So then we put them in this world where they just wanted to travel and sing songs to the Vietnam troops. So, tone is one of the things I'm most proud about and now it has sold around the world, to everywhere you can sell a film I think except for Japan, I think we got it right."
The ability to shoot in Vietnam was another coup, given that The Sapphires "was the first Western film in about 10 or 12 years that had shot over there".
So, how easy was it to put an American army vehicle back on the streets of Saigon? "Good question," laughs Blair. "We did a lot of preparation but getting a couple of vehicles in Saigon was down to the producers."
Blair, instead, worked as hard as time allowed to cram everything in. "We could work longer hours with Vietnamese crews, so we were doing 14 to 16-hour days. You think you're going to get it all but it was like cramming everything into an exam for myself and the behind-the-camera people. We just worked our asses off.
"I remember in the hotel on the last night that I slept like a baby ... every other night I was a little bit pensive and a bit here and there. These guys [his cast] kept partying but I was in bed by 10pm."
He's been sleeping soundly ever since.
The Sapphires opens in cinemas on November 7.