The theatre was founded in 1818 by James King and Daniel Dunn (formerly managers of the Surrey Theatre in Bermondsey), and John Thomas Serres, then the marine painter to the King. Serres managed to secure the formal patronage of Princess Charlotte and her husband Prince Leopold of Saxe-Coburg, and named the theatre the Royal Coburg Theatre. The theatre was a "minor" theatre (as opposed to one of the two patent theatres) and was thus technically forbidden to show serious drama. Nevertheless, when the theatre passed to George Bolwell Davidge in 1824 he succeeded in bringing legendary actor Edmund Kean south of the river to play six Shakespeare plays in six nights. The theatre's role in bringing high art to the masses was confirmed when Kean addressed the audience during his curtain call saying "I have never acted to such a set of ignorant, unmitigated brutes as I see before me." In 1825 a young American actor, Ira Aldridge, played here in this second job in the country in an abolitionist play, 'The Revolt of Surinam'. It was the start of a groundbreaking classical, international career. Aldridge was 18 years old, Black American and by the time of his death in 1867 he was one of the biggest stars of his day. More popular staples in the repertoire at the theatre were "sensational and violent" melodramas demonstrating the evils of drink, "churned out by the house dramatist", confirmed teetotaller Douglas Jerrold. When Davidge left to take over the Surrey Theatre in 1833, the theatre was bought by Daniel Egerton and William Abbot, who tried to capitalise on the abolition of the legal distinction between patent and minor theatres, enacted in Parliament earlier that year. On 1 July 1833, the theatre was renamed the Royal Victoria Theatre, under the "protection and patronage" of Victoria, Duchess of Kent, mother to Princess Victoria, the 14-year-old heir presumptive to the British throne. The duchess and the princess visited only once, on 28 November of that year, but enjoyed the performance, of light opera and dance, in the "pretty...clean and comfortable" theatre. The single visit scarcely justified the "Old Vic" its later billing as "Queen Victoria's Own Theayter".
In 1841, David Osbaldiston took over as lessee, and was succeeded on his death in 1850 by his lover and the theatre's leading lady, Eliza Ann Vincent, until her death in 1856. Under their management, the theatre remained devoted to melodrama. In 1858, sixteen people were crushed to death inside the theatre after mass panic caused after an actor's clothing caught fire. At this time, the theatre was playing to an audience of working class patrons from the surrounding slums, and Henry Mayhew wrote that "at each step up the staircase the warmth and stench increase until by the time one reaches the gallery doorway […] the odour positively prevents respiration." In 1867, Joseph Arnold Cave took over as lessee. In 1871 he transferred the lease to Romaine Delatorre, who raised funds for the theatre to be rebuilt in the style of the Alhambra Music Hall. Jethro Thomas Robinson was engaged as the architect. In September 1871 the old theatre closed, and the new building opened as the Royal Victoria Palace in December of the same year, with Cave staying on as manager. By 1873, however, Cave had left and Delatorre's venture failed. In 1880, under the ownership of Emma Cons (for whose memory there are plaques outside and inside the theatre) it became the Royal Victoria Hall and Coffee Tavern and was run on "strict temperance lines"; by this time it was already known as the "Old Vic". The "penny lectures" given in the hall led to the foundation of Morley College. An endowment from the estate of Samuel Morley led to the creation of the Morley Memorial College for Working Men and Women on the premises, which were shared; lectures were given back stage, and in the theatre dressing rooms. The adult education college moved to its own premises nearby in the 1920s. On 24 November 1923, the theatre participated in a pioneering radio event, when the first set of the opera La Traviata was broadcast live by the BBC, using transmitters in London, Manchester and Glasgow, via a specially installed relay transmitter on the roof of the adjacent Royal Victoria Tavern.
With Emma Cons's death in 1912 the theatre passed to her niece Lilian Baylis, who emphasised the Shakespearean repertoire. The first radio broadcasts from the theatre were made as early as October 1923, by the British Broadcasting Company. The Old Vic Company was established in 1929, led by Sir John Gielgud. Between 1925 and 1931, Lilian Baylis championed the re-building of the then-derelict Sadler's Wells Theatre, and established a ballet company under the direction of Dame Ninette de Valois. For a few years the drama and ballet companies rotated between the two theatres, with the ballet becoming permanently based at Sadler's Wells in 1935. Baylis died in November 1937.
The Old Vic was damaged badly during the Blitz, and the war-depleted company spent all its time touring, based in Burnley, Lancashire at the Victoria Theatre during the years 1940 to 1943. In 1944, the company was re-established in London with Ralph Richardson and Laurence Olivier as its stars, performing mainly at the New Theatre (now the Noël Coward Theatre) until the Old Vic was ready to reopen in 1950. In 1946, an offshoot of the company was established in Bristol as the Bristol Old Vic.