The building was designed by Herbert J. Krapp. The noted theater designer included a few designs that are similar to those found within a Catholic church such as the central dome and stained glass panels. During the Great Depression, Arthur Hammerstein went bankrupt and was forced to sell the theater.
The former theater served as a nightclub for a few years before CBS leased the building in 1936. CBS originally used the building for radio broadcasts. Noted architect William Lescaze redesigned the theater's interior, covering the once ornate walls with white paneling that reflected the Modernist preferences of many during the mid-20th century. The theater was used by CBS for television production in the 1940s.
In 1950s, the theater became the home of one of the most beloved and popular programs in the history of television. In 1948, Ed Sullivan Show began hosting a variety show that was originally known as the Toast of the Town. Later known as the Ed Sullivan Show, the famed variety show became an American institution. Numerous other television programs were filmed in the theater, but none came close to the popularity and cultural impact of the Ed Sullivan Show. For many years, the Ed Sullivan Show was a sought-after gig for aspiring musicians. the show launched the careers of many stars, including a young Elvis Presley in 1956. And it was on the show that the Beatles made their first U.S. television appearance during their first American tour in 1964.
The Ed Sullivan Show ran until 1971. In the next decade, CBS used the theater for a number of game shows and sitcoms. CBS sold the property in the 1980s but bought the building back in 1993. At that time, CBS was home to Late Night with David Letterman and the theater was renovated and utilized for Letterman's program. When Letterman retired in 2015, Stephen Colbert was hired to host the show which has increased in popularity as modern audiences tune in to hear his comedic take on current events.
At the start of Colbert's tenure, the theater again underwent a significant restoration. The dome, which was almost entirely covered when Letterman occupied the building, was made visible along with the stained glass panels. With the 2015 restoration, the building once again includes many of the design features that were part of the original1927 design. In the 2000s, the building has hosted several rooftop concerts by big-name performers, including Paul McCartney. The building is listed on the National Register of Historic Places.