The original location was an open-air theatre in medieval times, where short performances and some theatrical pieces, which became part of famous classical literature in later years, were staged.

[8] The theatre consisted of a stage, costume room, bleachers for men, ninety five portable banks, a hall for women, balconies with iron railings or grilles, master channels and roofs covering the stands.

[8] This original structure was maintained until 1735, when a new building, concluded in ten years, was erected by architect Juan Bautista Sacchetti in cooperation with Ventura Rodríguez.

[5] In the 18th century, both theatres were demolished and rebuilt in Italian architectural style with modern facilities such as an expansive stage with mechanized operation and artificial lighting.

[5] In 1825, under the direction of French impresario John Grimaldi, the theatre underwent a series of improvements such as lighting and props in both structural and artistic fields.

[18] Between 1930 and 1935, except for February and May 1931,[19] the theatre was occupied by the companies of Margarita Xirgu, and Enrique Borrás, through which the works of Federico Garcia Lorca and Rafael Alberti premiered under the direction of Cipriano Rivas Cherif.

[11] During the period of the Spanish Civil War, the concession of the theatre was in the hands of actor Manuel González, who staged El alcalde de Zalamea on 28 March 1939,[22] the day the troops of Francisco Franco took Madrid.

Between the end of the war and the mid-1940s, the concession of the theatre was handed over to the companies of Ana Adamuz, Nini Montian-Guillermo Marin, Fernando Díaz de Mendoza y Guerrero-María Guerrero López.

During the years of dictatorship, literary milestones such as Historia de una escalera and the introduction of contemporary foreign authors such as J.B. Priestley and Jean Anouilh premiered at Teatro Español.

[27] After a whole year of joint management between the Ministry of Culture and the City Council, headed by a board of directors, the theatre went back to the municipality of Madrid on 16 October 1981,[11] with the auditorium now accommodating 763 spectators.