The theater was founded in 1909 by Andreas Habermas, a businessman from Carrington. He started a business in the 1900s of traveling with a projector and film from town to town, charging people to view the films. By the time he got to Rosetown, he was tired of the traveling and decided to settle down. He purchased a building and transformed it into a theater which opened on August 12, 1909.
Habermas Theater was the second theater in the country, after Koningstad's Palace Grand which opened in 1907. The original wooden building was replaced in 1924, in order to expand and make it safer. As of 2011 it still operates.