It is based in a building which spans a passage between Vesterbrogade and Gammel Kongevej in Copenhagen's theatre district on the border between Vesterbro and Frederiksberg.

The application was initially rejected by Peter Adler Alberti, the minister of Justice, supposedly due to a link with Folketeatret's director, but after personal intervention from King Frederik, the license was finally granted.

Shortly after construction start, a disagreement occurred between Bona and Gudme who was ultimately fired from the project which was instead completed by Ludvig Andersen.

[2] Lindstrøm, who also was the theatre's first director, had declared himself willing to set up everything at his new theatre, the second largest in Copenhagen, but the opening performance, Pierre Berton's Den skønne Marseillanerinde, an extravaganza about Napoleon with a young cast featuring such later stars as Poul Reumert, Asta Nielsen and Clara Wieth, became exemplar of the repertoire during the first three decades.

During this era, Det Ny Teater came to challenge the Royal Danish Theatre as the leading theatrical stage in Denmark.

The writer Knud Poulsen was appointed director in 1969 and by 1971 the theatre faced closure but was saved when the county and Ministry of Culture stepped in and compensated for reduced ticket prices.

Bent Mejding was the driving force behind the restoration of the theater, which he and Niels-Bo Valbro reopened as a venue for operetta and musicals with a production of Die Fledermaus in 1994.