The Capitol Theatre opened inside the 10-story Kahl Building in downtown Davenport on Christmas Day 1920. At the time of opening, it was considered a state-of-the-art movie palace and was the largest such venue in the state, with a capacity for 2,500 patrons. The stage was expanded in 1925 to allow for a wider variety of theatrical productions and vaudeville performances. By 1977, the Capitol Theatre ceased operation as a working movie theatre.

In 1994, the theatre, along with the entire Kahl Building was donated to Scott County Community College, part of the Eastern Iowa Community College District. Two years later, the building opened as an education facility and currently, 1,000 students take classes in the building each semester.

In February 2008, the Community College entered an lease agreement with a newly-established local organization, Capitol Theatre LLC. In exchange for the lease cost of $1 per year, the organization would be responsible for maintenance, renovations, and booking of the historic venue. Though the slowly gained traction and saw several successful events booked, Capitol Theatre LLC was unable to secure the estimated $2 million needed to renovate and modernize the building’s 90-year-old physical systems, and the theatre’s last event was held June 5, 2010.