At mid-sixteenth century, this location was the Corral de la Pacheca, a local comedy place that the guilds hired to collect money to fund hospitals, and to do their maintenance.
It was inaugurated on September 21, 1583, as Corral del Principe and from 1631, with the founding of the Authors Guild, it lived its peak of success.
It opened as a theater from 1746, with the name of Coliseo del Príncipe (Prince Coliseum). After 1850, this theater began to called Teatro Español (Español Theatre), until today.
In its nearly 500 years of existence, this theater has suffered several wars, and three fires. Therefore, it has been rebuilt, and remodeled many times.
The legend tells that there has been paranormal activity, where strange noises, moans, and sudden temperature drops have been experienced in the Español Theatre.
Some researchers who have studied these strange events, assert that inside the theater, there have been two people killed. Others say that this paranormal activity is due to ghosts of people that died in the fires of the building, and many others attribute it to the fact that there was a convent located in this site, where there was a crypt.
Also, since the Spanish Theatre is near Plaza Santa Ana, some researchers say that this site is where the oldest ghost of Madrid lived.