Building began in 1921 and finished in 1922 at a cost of $100,000. The Avalon Theatre immediately became, “The Showplace of the Eastern Shore." Visually spectacular, its detail included leaded glass doors at every theater entrance, an 18-foot dome with 148 lights, a 300 pipe electric-pneumatic organ, an electric player piano, and a ballroom on the second floor.
When the Schine Theatre Chain purchased the Theatre in 1934, they completely refitted the building. The ballroom was closed, and the theatre redesigned with an Art Deco theme that still stands today. In the process of the makeover, the theater lost many of its accouterments in favor of the Art Deco theme, but its reputation as a movie house grew quickly. Generations of Eastern Shore movie-goers saw Clark Gable’s first screen kiss, 
Bette Davis’ first psychotic role, and Roy Rogers’ first gunfight at the Avalon. Three world premieres took place at the Avalon including "The First Kiss" starring Gary Cooper and Fay Rae, which was filmed in Easton and St. Michaels. The Avalon’s run as Easton’s premier movie house ended in 1985 after 64-years. Suffering from mildew, cracks in the walls, stained carpeting and rickety seats, the Avalon closed and remained dark until November 1987.
Under the leadership of Easton Mayor George Murphy and in partnership with a private restaurant group led by Dick Edgar and Will Howard, renovations began in late 1987 to restore the Theatre building beyond its former glory. Finished in 1989, the Avalon was magnificently restored and upgraded to a performing arts center, retaining its proscenium stage, domed ceiling, and incredible acoustics. The restaurant group redeveloped the remainder of the building and added a third floor, incorporating fixtures and finishes hearkening back to the building's 1920's origins. The Theatre did not immediately thrive following the renovations however. Following the 1.36 million dollar makeover, the Theatre was sold to the Mid-Shore Center for the Performing Arts, which was unsuccessful in maintaining profitability. With no audiences the restaurants failed soon thereafter. In order to save the Theatre, it was repurchased at auction in 1992 by its sole bidder - the Town of Easton. The restaurants were subdivided, the pieces of which were sold off and have changed hands many times since. 
After intensive discussion and analysis by a planning group, the town decided to turn the operation over to a non-profit corporation, its Board of Trustees and professional management. In 1994 the town entered a lease agreement with the Avalon Foundation, Inc, founded by John General and Ellen Vatne. Soon thereafter the Avalon Theatre began its rapid growth under their leadership as a center for the performing arts and community events. Since the Avalon Foundation took over, the Theatre has been outfitted with state of the art sound and lighting, video projectors, television production facilities, and a friendly but elegant atmosphere.