It is the oldest of Melbourne's large picture palaces and is known for its extravagant decor and abstract motifs, including an intricate geometric ceiling containing thousands of coloured lights designed to evoke the walls of a crystalline cave.

[1] While the cinema was saved, its seating capacity was reduced and parts of the original ground level foyer were replaced by a shopping arcade.

RMIT University purchased The Capitol in 1999 for use as a lecture theatre, and in 2014 it was closed to undergo an extensive five-year restoration and upgrade.

On the first night people simply stared.The building is noted for its unusual mixed uses, and for the structural design that allowed them to co-exist, as well as for the daring cantilever of the concrete street verandah, but it is the geometric plaster ceiling of the theatre auditorium that is the most outstanding feature.

The ceiling plasterwork incorporated hidden lighting of about 4000 coloured globes in red, yellow, blue and green, which could be controlled from a central point to produce different effects, used on their own and in conjunction with the original orchestral scores in the early silent film era to add drama for the spectator.

After the advent of television in the late 1950s, cinema audience numbers everywhere dwindled dramatically and in the early 1960s Hoyts Theatres let their lease expire.

Other long running engagements over the years included the films Ryan's Daughter (1970), The Towering Inferno (1974), A Star Is Born (1976) and Superman: The Movie in 1978.

In 1999, RMIT University acquired the space in part to preserve the heritage of the building, but also to use it as a large CBD-based lecture theatre.

Their purchase included the blocked off dress circle lobbies as well as the main auditorium and the 1960s foyer, and the renovation plans sought to re-connect all the foyer areas (including demolishing a concrete floor that subdivided the dress circle lobby in two), as well as giving the building an overall safety upgrade, and disabled access.

[13] This was to be the first full restoration of the iconic venue, with new services, upgraded access including a disabled lift, new seating, and state of the art projection equipment for all media.

All the decorative plaster in the auditorium and foyers was cleaned, repaired and repainted, carpets recreated based on original samples, and the decision was made to replace the hard to maintain coloured globe lighting of the main auditorium with LED lighting, able to be programmed in an infinite variety of configurations and sequences.