The theatre was designed by C. J. Phipps and built by Messrs. Patman and Fotheringham at a cost of £20,000 and opened with a production of As You Like It on 20 October 1888.

Robert Courtneidge was lessee for most of the early years of the 20th century and produced mostly comic operas and Edwardian musical comedies, including Tom Jones (1907), the record-setting hit The Arcadians (1909), Oh!

In 1914 Basil Rathbone appeared at the Shaftesbury as the Dauphin in Shakespeare's Henry V.[citation needed] Courtneidge's successors from 1917 to 1921 were George Grossmith Jr. and Edward Laurillard.

They produced a number of shows, including Arlette by Austen Hurgon and George Arthurs (1917); Baby Bunting by Fred Thompson and Worton David (1919); and The Great Lover, by Leo Ditrichstein, Frederic Hatton and Fanny Hatton (1920).

[2] In 1941 the theatre was so severely damaged by aerial bombardment that the lease was vacated, and in 1956 the site was appropriated by the London County Council for a proposed new fire station to replace the one next door.