The theatre was remodelled in 1937 to the plans of Chicago based architect Lawrence Monberg of architectural firm Monberg & Wagner.
In 1957, the Gayety Theatre switched from first-run features to Spanish-language films, reflecting the change in the populace of the neighborhood from heavily Eastern European to mainly Latino. It was from then on called the Teatro Gayety.
A fire gutted the Teatro Gayety in May of 1982, and the theatre was demolished not long after, replaced by a restaurant.