The theatre was initiated in 1882 by Sefton Parry and on 11 March that year, The Royal Avenue Theatre opened with a revival of Offenbach's Madam Favart. The prefix Royal was soon dropped from the theatre's name, but comic operas, burlesques and the like remained the staple fare for several years.
In the early 1890s the emphasis changed to drama and in 1894 Miss Horniman, the tea heiress, anonymously sponsored the actress Florence Farr in a season of plays. Sadly, the first production failed but Miss Farr persuaded her friend, a certain George Bernard Shaw, to finish his play, Arms and the Man, as a speedy replacement and his first West End production.
The theatre was rebuilt in 1905 to the designs of Blow & Billerey. During the work, part of the roof of the adjacent Charing Cross railway station collapsed with part of the stations western wall crashing through the roof and wall of the theatre, resulting in the deaths of three people in the station, three workmen in the theatre and injuring many.
The theatre was repaired and re-opened as the Playhouse Theatre on 28th January 1907 with a one act play called The Drums of Oud. Since then, the Playhouse has hosted the likes of WS Gilbert, legendary actress-manager Gladys Cooper and the BBC.
In 2013 The Ambassador Theatre Group acquired 100% ownership of the theatre and since then The Playhouse has been home to (amongst others) La Cage Aux Folles, Spamalot, Matthew Perry's West End Debut The End of Longing, 1984 and most recently The Kite Runner.