There has been a theatre on this Lime Street corner since the Victorian era. The first building, the New Prince of Wales Theatre and Opera House, opened on 15 October 1866 and was then the largest theatre in Liverpool. It was renamed the Royal Alexandra Theatre and Opera House on 29 July 1867 in honour of Alexandra, Princess of Wales. After closing in 1894 it reopened the following year under Empire Theatre (Liverpool) Ltd, and in 1896 it was sold to Messrs Moss and Thornton for £30,000 and renamed The Empire. That building gave its final performance on 16 February 1924 and was demolished.
The present Liverpool Empire opened on 9 March 1925 with a production of Better Days starring Stanley Lupino, Maisie Gay and Ruth French. It was designed by W. and T. R. Milburn for Moss Empires, with carving and auditorium ornamentation by E. O. Griffiths. The steel framed building has a Portland stone façade in a free Neoclassical style, and its raked seating layout was regarded as advanced for the time. It was listed Grade II on the National Heritage List for England on 16 October 1990 and sits within the William Brown Street Conservation Area.
The Empire's guest list reads like a history of British popular entertainment. Fred and Adele Astaire, Frank Sinatra, Judy Garland, Bing Crosby, Mae West, Laurel and Hardy, Sarah Bernhardt, Henry Irving, Vesta Tilley and Arthur Askey all appeared here, as did Shirley Bassey, Ken Dodd, Morecambe and Wise, Victoria Wood, Kate Bush, Elton John and Cilla Black. A local group called The Quarrymen played the theatre in 1957, returned in 1959 as Johnny and the Moondogs, and came back in 1962 as The Beatles, playing the Empire for the last time on 5 December 1965. The Rolling Stones appeared with Ike and Tina Turner and The Yardbirds on 25 September 1966.
Moss Empires still owned the theatre in 1977 and was planning to dispose of it; Merseyside County Council acquired it two years later and spent £680,000 over the following two years on backstage improvements and on extending the stage and orchestra pit. A further major refurbishment in 1999 enlarged the stage again and improved audience facilities, and an extension was added on the north side in 2002, by which time the theatre was owned by Clear Channel Entertainment. Two Royal Command Performances were staged here in the 1970s, and the theatre hosted the Royal Variety Performance in 2007 to mark Liverpool becoming European Capital of Culture the following year. The Empire has been part of ATG since at least 2011.