As early as 1865, Ludwig II commissioned Gottfried Semper to design a Richard Wagner Festival, but the plan came to naught, and Wagner built his own Festival Theatre in Bayreuth. General Manager Ernst von Possart then took up the subject again around the turn of the century.

A real estate consortium planned the extension of Prinzregententheater on the other side of the Isar toward the east. A newly constructed theatre improved the value of the entire neighborhood. On August 20, 1901, the theatre was opened after a construction period of only one year.

After World War I, the Prinzregententheater, as it was called, had to be adapted to the acoustic requirements of spoken drama, which at the time had no suitable performance site in Munich.  The bombs of the Second World War may have damaged the theatre partially, but it was quickly repaired, so that the Bavarian State Opera could begin its operations there in 1945. The big house on Maximilianstrasse was totally destroyed.  With the reopening of the National Theatre in 1963, however, the lights in the Prinzregententheater went back out – the house was closed because of structural faults.

With the aid of private contributions, the auditorium was completely renovated in 1988. By 1996, the stage area had also been completely restored and supplied with an orchestra pit that could be automatically raised and lowered.

On November 10 of the same year the Prinzregententheater witnessed a festive reopening with Tristan und Isolde. Today, the theatre is the headquarters of the Bavarian Theatre Academy. It is used both for student performances as well as for performances by the Bavarian State Opera and guest appearances.