The Prince of Wales, later George IV, gave his assent for a theatre on the site in 1806, and the building opened on 27 June 1807 with a performance of Shakespeare's Hamlet. The early years were a financial struggle until the actor Henry John Nye Chart bought the theatre in 1854 and brought in the theatre architect Charles J. Phipps to lead a programme of expansion and redevelopment.
That investment turned the Royal into a respected house. When Nye Chart died in 1876 his wife, Ellen Elizabeth Nye Chart, took over and became one of the first female theatre managers in the country, continuing the theatre's success; a statue in her honour stands in the Royal Circle bar. Prosperity in 1920 allowed the directors to buy neighbouring properties, the Colonnade Hotel followed in 1923, now the Colonnade bar, and the last major enlargement of the auditorium came in 1927.
Walter Hackett's Other Men's Wives premiered here in 1928 before transferring to the West End, and later premieres included The Ninth Man in 1931, Frieda in 1946, Young Wives' Tale in 1949, Escapade in 1952 and Not in the Book in 1958. Through the middle and later twentieth century the theatre was a regular try out date for plays by Ibsen, Rattigan, Coward and Orton ahead of London runs, with the Redgrave family, Laurence Olivier, John Gielgud, Charlton Heston, Marlene Dietrich, Margot Fonteyn, Rex Harrison, Judi Dench and Paul Scofield all appearing on its stage. It was listed Grade II* on 20 August 1971.
The London impresario David Land bought the theatre in 1984 and subsidised productions from his own pocket, and he and later his son Brook ran it for around fifteen years. The Ambassador Theatre Group purchased the theatre in 1999 and began a full-scale modernisation. In 2007 the Royal marked its bicentenary with a visit from Queen Elizabeth II. In more recent years the theatre has often replaced its traditional Christmas pantomime with festive-season hits, among them Spamalot in 2011, The Rocky Horror Show in 2012 and Priscilla Queen of the Desert in 2013.