The Gaiety is situated on Harris Promenade, overlooking the sea and adjacent to the Villa Gardens, Arcade and Butts.

Built in 1899 to the designs of architect Frank Matcham as an opera house and theatre,[1] the Gaiety, along with the nearby Villa Marina, stands on the site of a lodge occupied in the early 19th century by Castle Mona architect and Atholl family retainer George Steuart, and then later bought by benefactor Henry Bloom Noble and donated for recreational use.

Part of the plans saw the creation of a dome above the stalls which included a stained glass ceiling lit from above together with an elegant and playful interior inside the narrow shell of the Pavilion's Belfast Roof and the remains of the Villa house.

[2] The new entrance facade, with its upstairs loggia, pedimented towers and flamboyant stucco decoration, took its inspiration from the buildings of the Italian Renaissance,[2] while the interior, with its ceiling paintings and ornate plasterwork, combined Baroque and Elizabethan elements.

The theatre opened on 16 July 1900, with a West End production of "The Telephone Girl" featuring Ada Blanche.

[2] Various attempts were made to regain its former commercial success, including installation of cinema equipment in the 1920s and a 1938 ice show.

The Second World War period and aftermath saw deterioration of the building outside the means of the owners to repair and by 1970 the theatre came "just one signature away" from being demolished.

The theatre underwent further restoration, under the direction of Mervin Stokes, MBE, from the 1990s to replicate its 1900 opening condition in time for the centenary celebration in 2000.

In 1978, the organisation Friends of the Gaiety was formed to undertake fundraising for the theatre’s restoration, and to assist with day-to-day operations.