The River Oaks Corporation built the River Oaks Theatre in 1939 at the edge of its River Oaks Community Shopping Center on West Gray, a center the City of Houston calls the city's first auto-centered suburban shopping center. The Dallas firm Pettigrew & Worley designed it in the Streamline Moderne style, with bas-relief panels called 'Land' and 'Sea' by Buck Winn Jr. beside the stage and a boomerang-shaped neon marquee out front. It opened on November 28, 1939, with Ginger Rogers and David Niven in Bachelor Mother. The first lessee, Paul Scott, lasted only a few months; in March 1940 the Interstate Theatre Circuit took over the lease and ran the house into the 1970s. In 1949 the Houston Players staged William Saroyan's The Time of Your Life there with Eddie Dowling producing.
The theater turned toward offbeat programming in 1975, when it gave The Rocky Horror Picture Show its Houston debut. Landmark took over the lease in 1977 and booked double features of classic, foreign, cult, and art films, plus late shows. That programming drew trouble: vice officers arrested the manager during a 1982 showing of Pasolini's Salo (he was found not guilty), a 1983 screening of Fire on the Water drew a Ku Klux Klan protest, and Godard's Hail Mary stirred controversy in 1985. The house also held premieres, including Richard Linklater's Dazed and Confused in 1993. In 1986 Landmark split the balcony into two small auditoriums.
When a 2006 report warned that the shopping center might be partly razed, Linklater, Bun B, and Wes Anderson joined local advocates. The city designated the center and theater a local landmark in 2007, and Preservation Texas put the theater on its Most Endangered list the same year. Landmark kept the River Oaks open until March 2021, when lease talks with Weingarten Realty failed during the pandemic; the nomination calls it Houston's oldest continuously operating theater at that point. Kimco Realty, which bought Weingarten in 2021, announced a new lease in February 2022, and Culinary Khancepts, the Houston company behind Star Cinema Grill, took on the theater that year. After a renovation that restored the marquee, the River Oaks reopened on October 3, 2024, with art-house, classic, and live programming. It was listed in the National Register of Historic Places on October 25, 2024.