In 1905, the Theater's cultural importance was overshadowed by violence between two rival Chinese gangs. After an evening of watching The King's Daughter, four On Leong Tong members were shot by several members of the Hip Sing Tong. Before the shooting, the two gangs had been competing against one another for years over gambling, prostitution, and drugs, but large scale violence was rare. That changed when Mock Duck, a Chinese-American from San Francisco, came to New York to gain power over the traditional Chinese organized crime in the area. Most people believe he ordered the attack that launched a war between the two gangs. The war would last for years until both gangs realized that they were ruining business for themselves because patrons were too afraid to come down Doyers Street, which included going to the Chinese Theater.
The Theater was closed after declining patronage in the early 1910s. After it closed, the space was turned into a mission house for the Rescue Society of New York. In 2016, the old Chinese Theater was converted into a restaurant, the Chinese Tuxedo. A restaurant by the same name had been opened on Doyers Street around the same time as the Chinese Theater.