Interstate Theater Circuit built the Forest Theatre in 1949 to replace its smaller 1914 Forest Theatre in South Dallas, building the new house just east of the old one. Pettigrew-Worley & Co. designed the Streamline Moderne building on Forest Avenue, now Martin Luther King Jr. Boulevard, beside the new Central Expressway. It had a three-sided neon tower, a porcelain-enameled steel front, a sweeping lobby ramp and a two-story mural of tropical plants and birds by Eugene Gilboe. With 1,480 seats and a row of shops, it cost more than $300,000 and was Interstate's largest theater. More than 5,000 people jammed the opening on July 29, 1949, for It Happens Every Spring.
The Forest was built for white audiences only. As Black families moved into the surrounding neighborhoods and white residents left, business fell. On February 21, 1956, Interstate closed the theater to white customers, and on March 2 it reopened for Black patrons with spotlights, speeches, the Booker T. Washington High School band and a double feature of Helen of Troy and The Nat King Cole Story. Reports called it likely the largest Black theater in the southern United States. It mostly showed second-run films, and by late 1958 it was open only on weekends.
When activists protested segregated Dallas theaters in 1960 and 1961, Interstate answered that Black moviegoers had the Majestic's balcony and the whole Forest; demonstrators replied that the Forest was out of the way and showed second-run pictures. Dallas theaters were integrated in mid-1963, and Interstate stopped showing movies at the Forest in September 1965.
In 1967 the building became the Central Forest Club, where Rubin Willis booked Marvin Gaye, Aretha Franklin and B. B. King, and later hosted acts from Ike and Tina Turner to Prince. After the auditorium was divided in 1976, part of it appears to have run as a cinema showing blaxploitation films in 1978. Erykah Badu leased the theater from 2003 to 2009 and ran it as the Black Forest Theatre, with concerts, community events and film screenings. Vacant since 2009, it was bought in 2017 by the nonprofit CitySquare, which planned to rehabilitate it as a community arts and training center. It was listed in the National Register of Historic Places on December 4, 2019.