[1] The theatre, originally known as "the Grand Old Lady of Oxford Street", opened on 18 May 1891, having been designed by the architect Alfred Darbyshire at a cost of £40,500.

The Arts Council supported it in the 1980s, and after major internal refurbishment and an enlarged stage facility, it was run by a charitable trust, Norwest Holdings.

[5] In March 2020, the theatre acquired Charitable Incorporated Organisation (CIO) status along with the Opera House.

[7][8] A year later, The Lowry sent an open letter to the then Secretary of State for Culture, Olympics, Media and Sport, Ben Bradshaw, Arts Council England, Manchester City Council and the ROH, calling for the scheme in its current form to be scrapped,[9] but the two venues reached an amicable settlement later the same year.

During the early part of the 20th century it came into its own, with artists such as Danny Kaye, Gracie Fields, Charles Laughton, Judy Garland, Noël Coward and Laurel and Hardy making appearances.

On 11 November 2023, the first UK and Ireland tour of Hamilton opened at the Palace Theatre for a 15-week season until 24 February 2024.