It gained historical significance on November 22, 1963, as the location of Lee Harvey Oswald's arrest over the suspicion he was the killer of Dallas Police Officer J. D. Tippit and President John F. Kennedy.

[5] Julia Postal, however, never saw Oswald enter the theater, relying on the account of Johnny Calvin Brewer, a manager at Hardy's Shoe Store's which, according to the official government report, happened at 1:35 p.m.. Texas Theatre patron Jack Davis also corroborated Burroughs' time, claiming he observed Oswald in the theater prior to 1:20 pm.

However, the actual chair was removed by then manager "Butch" Burroughs, who took it home and replaced it with another which the FBI confiscated the next day for evidence thinking it was the original Oswald seat.

Former usher and sign changer Don Dubois of Texas Rosewin-Midway Properties saved the theater from the wrecking ball in 1993, but two years later, it was nearly destroyed by a five-alarm fire, forcing another closure.

[10] The foundation used the funds to secure and restore the building needed after years of neglect and fire damage and the venue began hosting movies and special events soon after.