Designed by the London theatre architects Ernest Runtz and Ford and built in brick and Bath Stone, the New Theatre opened to the public on 10 December 1906. It was commissioned by Robert Redford, who had spent the previous nine years running the Theatre Royal. The stage was among the largest in the country at the time, measuring 76 feet wide by 54 feet deep, with 57 feet from the stage to the pulley grid above. The opening performance was Twelfth Night, given by Herbert Beerbohm Tree's company from His Majesty's Theatre in London, with Colonel Newcome, Trilby, The Man Who Was and Hamlet also staged in that first week.
The theatre showed its first film, The Birth of a Nation, in 1917, accompanied by a full orchestra. In the late 1920s the BBC broadcast performances and concerts live from the building, including the third act of Faust by the Carl Rosa Opera Company in October 1928. From 1931 structural alterations were made for projectors, sound equipment and a large screen, and for four years the venue operated mainly as a cinema with occasional live shows, until Prince Littler bought it in 1935 and returned it to full-time live performance.
Sarah Bernhardt, Anna Pavlova, Laurel and Hardy, Tommy Cooper, Tessie O'Shea, Tom Jones and Shirley Bassey have all appeared here, and Harold Pinter's The Homecoming had its world premiere on the stage on 26 March 1965. Welsh National Opera made the theatre its home and principal base from 1954 before eventually moving to the Wales Millennium Centre. Falling audiences in the early 1960s brought the threat of demolition and a temporary closure, but Cardiff City Corporation took a lease and reopened the theatre in September 1963, buying it outright in 1969. That July, the Prince of Wales' post-investiture tour of Wales ended with a concert here.
The building closed in 1970 for refurbishment and gained a new stage in 1976, followed by extensive works in 1988 and 1989. Sir Anthony Hopkins unveiled a bronze bust of the writer Gwyn Thomas in the foyer in 1993, and a further refurbishment in 2006 included a facelift to the exterior. In 2012 the theatre closed for three months for new seating, a customer lift and repainting of the auditorium. After the longest closure in its history during the COVID-19 pandemic, it reopened in September 2021.