With hand-placed lettering and a trim of glinting lights on its marquee, The State Theatre announces itself with classy, old-fashioned glamour on Market Street. It’s a building to which the word iconic can fairly be attributed: a now-rare, early-20th-century part of Sydney’s architectural and cultural fabric.

“The whole building is a time capsule of what it was like to go to the movies in the ‘20s,” says Stuart Greene, the theatre’s resident tour guide and food and beverage manager. He’s as swift and efficient at dispensing historical facts as he is dispatching front-of-house staff to their stations with ice-cream trays. “It’s virtually as intact as it was when it was opened in 1929.”

But it’s not a building in stasis. This old movie palace hosts live performances – music, dance, stand-up comedy – many days of the week. Its stage lends itself well to these shows; it once provided a platform for a resident 30-piece orchestra to accompany a silent film or for the theatre’s full-time ballet troupe.

Performers enjoy the good acoustics and intimacy of the auditorium: while it seats more than 2000 people, the curving, three-tier design cleverly belies that fact. The State still hosts cinema events, too: much of the Sydney Film Festival is screened here and it often hosts world premieres.

In 1929, Sydney had a whole theatre district – similar to those in London or New York – that existed until the “demolition derby of the ‘70s”, when, as Greene describes, urban development was pitched doggedly on renewal. But when it opened, the State was one of 28 theatres in town competing for attention.

“And so the whole concept of the movie palace was about attracting people through your décor,” says Greene. “It was psychological architecture to give people an escape from the outside world and was supposed to transport you as soon as you walked in.”

Designed by eminent New Zealand theatre architect Henry E. White, the State Theatre really went to town. “When we opened we were advertised as the Empire’s greatest theatre,” says Greene. “We have Revivalist architecture which mixes and matches lots of different styles.”

The foyer, leading through to the ornate Grand Assembly, is in a Gothic style, and the auditorium itself is decked out like a European opera house. Each of the three levels of the theatre features its own male and female smoking rooms (or “character lounges” as they were known) each with its own theme.

Gentlemen could enjoy the Pioneer room, Empire Builders room or the Tudor-styling of the College room. Ladies could take to the Pompadour room, the Art Nouveau-style Butterfly room or the Art Deco-style Futurist room. In the ‘30s and ‘50s, these latter two rooms were considered passé and were painted over in shades of beige, cream and more beige.

Layers of paint have since been scraped back to reveal original paintwork and both rooms are in the process of being restored to their former eccentric glories. These defunct smoking rooms are ostensibly passageways today, an unexpected discovery on the journey to the bathroom.

The overall patchwork design is the manifestation of a wild and grandiose imagination. It seems wilder still once you learn of long-since-extinguished ideas. The Mezzanine, for example – once the sole-reserve of the wealthy – featured live fish tanks embedded in the walls. There’s even an art gallery of Australian paintings interspersed with antique statues and Napoleonic urns in its corridors.

The State Theatre claims a lot of firsts and onlys. It was the first theatre to have air-conditioning as we know it in Australia. So as not to spoil the immaculate design with an unsightly duct, a suspended, filigree ceiling was built that allows air to flow through its pattern of snowflakes. The auditorium has the second biggest hand-cut crystal chandelier in the world and Australia’s only Wurlitzer organ. It’s also the only movie theatre in Australia to have three levels – stalls, circle and mezzanine – and possibly the only to have a plaque depicting the legendary Medieval King Arthur in its foyer.

But it’s also one of only two of its kind left in Sydney. “We are a city that has basically destroyed our theatrical heritage,” says Greene. “There’s nothing left of it except for two converted movie palaces.” Just down the road on Campbell Street is the Capitol Theatre, opened in 1928 to replicate the experience of sitting outside in an Italian forum, complete with stars in the ceiling.

The State, like the Capitol, was spared demolition through chance and is now protected by heritage listing. “By the time they got around to demolishing this – they kept on announcing its imminent demolition – there weren’t many theatres left. In 1980 they made the decision to restore it instead.”

Visit statetheatre.com.au to see what’s on and for more information on guided tours.

Sydney Classics is a series in which we tell the stories of some of Sydney's most well-known (and under-the-radar) institutions. These places have stood the test of time and without a doubt make this city what it is at its heart.