On 9 November 1908, it was bought by Annie Horniman for £25,000 and reconstructed to plans by Frank Matcham, reducing its capacity from 2,500 to 1,300.

[1] During the time the theatre was being run by Annie Horniman, a wide variety of types of plays was produced.

They included Allan Monkhouse, Harold Brighouse, writer of Hobson's Choice, and Stanley Houghton, who wrote Hindle Wakes.

Actors who performed at the Gaiety early in their careers include Sybil Thorndike and Basil Dean.

[5] In 2008 Annie Horniman's centenary was celebrated by a performance of Houghton's play Independent Means, which had been recently "rediscovered" in the British Library by Chris Honer, the theatre's artistic director.