Sydney Theatre at Walsh Bay was first imagined to fulfil the need for a medium sized drama and dance venue to provide the missing link between the Drama Theatre at the Sydney Opera House and larger venues such as the Opera and Capitol Theatres. It now sits at the heart of the burgeoning Walsh Bay Arts Precinct, a vibrant cultural hub that is home to many of Australia's leading arts companies.

The name, Sydney Theatre, acknowledges and celebrates the premier role the theatre plays in Sydney's cultural life. It also pays homage to Australia's first theatre built in 1798, located nearby.

Designed by architects Peddle Thorp and Walker (City Recital Hall, Capitol Theatre), led by Andrew Andersons, and utilising state-of-the-art theatre and design technology, Sydney Theatre provides an optimal experience for audiences with excellent sight lines for dance and visual theatre and exceptional acoustics for spoken word drama.

Sydney Theatre occupies the sites of two of the working buildings of the historic Walsh Bay area. The impressive auditorium, stage, fly tower and public foyer areas are located where a 1950s warehouse called Bond Store 4 once stood, and the back of house is located in the lower floors of Parbury No.3 Bond Store.

The No. 3 Bond Store is an impressive late nineteenth century brick and stone Queen Anne style building, originally called Central Wharf. It was constructed by private merchants for the wool trade which was thriving despite the Depression and drought in the 1890s. In the early 1910s Sydney Harbour Trust bought the Store. It was renovated in the 1920s and used as one of the wharves of Walsh Bay.

Following World War II, the modern style Bond Store 4 was constructed in Bond Store 3's north yard. The six storey concrete framed building was connected to Bond 3. In the 1980s Bond Store 4 was used for arts and display but was demolished in 2000 to make way for the construction of Sydney Theatre.

Much of the site's history is still visible at Sydney Theatre where the preservation of the area's maritime heritage was central to the new building's development. From beautiful bare brick walls to intact warehouse machinery, the building speaks of its past while presenting some of the most exciting contemporary performance from around the world.

Two spaces within Sydney Theatre have been specially named in memory of two greats of Australian Theatre. The theatre's function room, The Ruth Cracknell Room, is proudly named after one of Australia's most-loved actors and former Board Director and Patron of STC. Sydney Theatre Company's first artistic director Richard Wherrett is honoured for his significant influence on Australian theatre and STC in particular by the naming of the Richard Wherrett Studio, a rehearsal space located on the ground floor.

Owned by the NSW State Government, Sydney Theatre is operated by Sydney Theatre Company, Australia's flagship theatre company.