In 1861, it was renamed the New Royalty Theatre, and the next year it was leased by Mrs Charles Selby, who enlarged it from 200 seats to about 650.

The theatre was managed by Henrietta Hodson during the early 1870s, who also produced mostly burlesques and comedies, including Gilbert's The Realm of Joy and Ought We to Visit Her?

In 1891, the theatre started a policy of modern drama, presenting plays by Ibsen and George Bernard Shaw.

The actress Frances Maria "Fanny" Kelly used the fortune saved from her highly popular career to establish a dramatic academy with a 200-seat theatre attached.

The theatre was "obscurely sited [and] perilously combustible", but it had "a relatively spacious stage, and Beazley's work in the auditorium was thought pretty.

"[3] The Times described the fashionable little theatre as "most elegantly fitted up and appointed, and painted in a light tasteful manner.

On the opening night, 25 May 1840, three pieces were presented: Summer and Winter, by Morris Barnett; a melodrama, The Sergeant's Wife; and a farce, The Midnight Hour.

Kelly's high admission charges of five or seven shillings did not help, but the main problem was that the tramping of the horse and the roar of the machinery drowned out the voices of the actors and caused the building to vibrate.

She renamed it the New Royalty Theatre, and had it altered and redecorated by "M. Bulot, of Paris, Decorator in Ordinary to his Imperial Majesty, Louis Napoleon", with "cut-glass lustres, painted panels, blue satin draperies and gold mouldings".

[3] In the opening programme, di Rhona danced, the leader of the Boston Brass Band from America played a bugle solo, and a melodrama, Atar Gull, was performed, with a 14-year-old Ellen Terry in the cast.

[1] On 25 March 1875 the theatre, under the direction of Madame Selina Dolaro, enjoyed an historic success with Trial by Jury, the first Gilbert and Sullivan opera produced by Richard D'Oyly Carte.

[3] In January 1876 at the Royalty, Pauline Rita appeared under Carte's management as Gustave Muller in The Duke's Daughter.

Later that year, the First Chief Officer of the London Fire Brigade strongly recommended that the theatre be closed.

Ibsen's Ghosts premièred, to predictable outrage, at the theatre, in a single private London performance on 13 March 1891.

The Lord Chamberlain's Office censorship was avoided by the formation of a subscription-only Independent Theatre Society, which included Thomas Hardy and Henry James among its members.

[3] In 1895–96 the Royalty's manager was Arthur Bourchier, and the theatre underwent another renovation, by architect Walter Emden.

[4] In 1911, J. E. Vedrenne and Dennis Eadie acquired the theatre, and in 1912, they staged Milestones, by Arnold Bennett and Edward Knoblauch (later Knoblock), which had over 600 performances.

By 1936 the danger of fire from celluloid stores and other adjacent properties overrided the argument made to the Lord Chamberlain that the theatre had been on the site before the development of the inflammatory trades nearby.

[3] Although several schemes were considered for its rebuilding, but with the growing threat of war, the theatre remained empty and soon became derelict.

[3] A modern Royalty Theatre was opened in the basement of an office block at Portugal Street near Aldwych in 1960.