The theatre was named for American actress Maxine Elliott, who originally owned a 50 percent interest in it, in partnership with The Shubert Organization.

She leased it to the Federal Theatre in 1936; the following year, it was shut down by the government on the eve on the opening of Orson Welles's production of The Cradle Will Rock.

In 1941, the theatre became a radio studio and in 1948 was converted for television production, where the very first episodes of Ed Sullivan's Toast of the Town variety show originated (from 1948 until 1953).

Throughout its lifetime, it housed a multitude of plays, including original works by George Bernard Shaw, John Millington Synge, Lady Augusta Gregory, Lord Dunsany, Lillian Hellman and Somerset Maugham.

Only nine of its dozens of productions were musicals, including one opera, See America First, by Cole Porter.