Built as a legitimate theater in 1900 by Oscar Hammerstein, it helped 42nd Street glorify as the City's new theater district. Hammerstein described a new establishment as the "perfect parlor theater...a drawing room of the drama dedicated to all that is best in dramatic and lyric art." The stage of the theater remembers such legends as Lionel Barrymore, Lillian Gish, Mary Pickford, and Tyrone Power. In the 1930s the theater became Broadway's first burlesque house.

Since its superb restoration in 1995, the New Victory can make three unique claims: it was the first 42nd Street theater to be renovated as part of the revitalization of Times Square, it's the oldest New York Theater still in operation, and it's the city's only theater devoted exclusively to productions for children and families. The street rapidly evolved after the debut of The New Victory Theater: in spring 1997, the Walt Disney Company opened the restored New Amsterdam Theatre; The New 42nd Street's Lyric and Apollo Theaters were leased to Livent and subsequently to Clear Channel Entertainment (now called Live Nation) to form the Ford Center for the Performing Arts (now called the Hilton Theatre), which opened in December 1997; the Liberty and Empire were leased to Forest City Ratner and then merged into an entertainment complex, which includes a 25-screen cineplex operated by American Multi-Cinemas and the renowned Madame Tussaud's Wax Museum; and, The New 42nd Street leased the Selwyn to the Roundabout Theatre Company, which opened the renovated theater in July 2000 as the American Airlines Theatre. In July 2004, the Times Square Theater was leased to develop a new flagship retail location.

Special programs for children and teenagers, called Junior VicTeens (for ages 11 to 13) and VicTeens (for ages 13 to 18) offer classes, evenings out with peers, and more.

Unlike its neighboring theaters with long running shows, the productions at the New Victory change every two weeks.