The Texas Theatre opened at 231 West Jefferson Boulevard in Oak Cliff on San Jacinto Day, April 21, 1931. It was developed by the Oak Cliff Amusement Company, part of the Robb and Rowley chain, whose partners included local showman C. R. "Uncle Mack" McHenry. Shortly before the opening, the Hughes-Franklin chain of Howard Hughes and Harold B. Franklin bought Robb and Rowley. Architect W. Scott Dunne designed an atmospheric house with a Venetian court interior, projected clouds and a night sky of 118 twinkling stars. With 2,000 seats it was the largest suburban theater in Texas and the third-largest theater in Dallas, and the National Register nomination calls it the first in the city built for talking pictures. About 7,000 people came on opening day.
On November 22, 1963, Lee Harvey Oswald slipped into the theater without paying during a showing of War Is Hell. A nearby shoe store manager, John Brewer, alerted cashier Julia Postal, who called police, and officers arrested Oswald in the auditorium after a short struggle. In 1965 the building was remodeled: the top of the facade came off and the original decoration was sealed under stucco.
United Artists, which bought the theater from Rowley United after that remodel, closed it in December 1989. The Texas Theatre Historical Society bought the building in 1990, and in 1991 Oliver Stone filmed JFK there, stripping the 1965 materials from the exterior so the theater looked as it had on the day of the arrest. The society could not keep up its mortgage payments and closed the theater in 1992, and owners including Texas Rosewin-Midway Properties and Pedro Villa ran it intermittently through a 1995 fire and long vacancies.
The Oak Cliff Foundation bought the theater in 2001 for $400,000, funded by a Community Development Block Grant grant/loan, and it was listed in the National Register of Historic Places on April 1, 2003, two years after the city designated it a Dallas Landmark. In 2010 Barak Epstein and filmmaker Eric Steele formed Aviation Cinemas, named for Hughes, and reopened the Texas as a working cinema. Aviation bought the property in 2019 and in 2021 completed a $2 million expansion that added a 165-seat upstairs cinema with 35mm and digital projection. The theater received a Recorded Texas Historic Landmark marker in 2013 and serves as headquarters of the Oak Cliff Film Festival, established in 2011.