Housed in an ornate Rococo-style edifice, the theatre was founded in 1887 and since 1921 has carried the name of Georgia's national poet Rustaveli.

These artists included prominent Georgian painters Lado Gudiashvili and David Kakabadze, as well as theatre set designer Serge Sudeikin, who is known for his work for the Ballets Russes and the Metropolitan Opera.

The masterpieces that once adorned the lower level of the Rustaveli Theatre were whitewashed during the period of Soviet rule and only a small portion of the frescoes has been restored.

Construction of the theatre was funded by Alexander Mantashev and it was designed by Cornell K. Tatishchev and Aleksander Szymkiewicz, Tbilisi's Municipal Architect.

From 2002 to 2005 the theatre underwent a thorough renovation, which was largely funded by Georgian businessman Bidzina Ivanishvili.