Built between 1919 and 1921 at a cost of $750,000, designed by famed Chicago-based architectural firm Rapp and Rapp and well-known Chattanooga architect Reuben H. Hunt, and constructed by the John Parks Company (general contractors), the theatre was one of the first air-conditioned public buildings in the United States.

[4][6] Reflecting the Beaux Arts architectural style prevalent in late 19th century and early 20th century America, the theatre contains a high rose-and-gold coffered ceiling, the original box office, a grand lobby with a white terrazzo floor inlaid with forest-green marble and music-motif medallions, crystal chandeliers, an elegant foyer, and red velvet-plush chairs.

[3] The primary colors of the dome panels and medallions in the outer lobby were blue and red with a salmon and gold background.

The Tivoli opened at 1 p.m. on March 19, 1921 for an entire day dedicated to multiple concerts by the Tivoli Symphony, screenings of Cecil B. DeMille's 1921 film Forbidden Fruit, and a personal appearance by Forbidden Fruit's Mae Murray,[3] all for the price of 15 to 55 cents.

Professor Spencer McCallie and Mayor Chambliss, both iconic people of Chattanooga, were presented to the public during this opening and gave speeches on their admiration for the theatre.

The second show, at 3 p.m., began similarly with the Overture of Orpheus by the Chattanooga Symphony, but then also incorporated a Prologue of A Cinderella Fantasy and another appearance of Mae Murray, before the second viewing of Forbidden Fruit.

The 7 p.m. show incorporated A Cinderella Fantasy along with the Orpheus the Overture, but it also featured toe dancers, impersonators, and readers.

At 9 p.m., Mae Murray along with the Forbidden Fruit cast visited for an appearance and the formal opening and dedication of the Tivoli theatre.