In 1731, António Manoel de Vilhena, Grand Master of the Knights of Malta, commissioned and personally funded the construction of this central building to serve as a Public Theatre. It was constructed in just ten months. The Portuguese Grand Master built the theatre to keep the young knights of the Order of St. John out of mischief but also to provide the general public with "honest entertainment." This motto was inscribed above the main entrance to the theatre, which still reads today: "ad honestam populi oblectationem". The first performance on the 19th January 1732 was a classic Italian tragedy, Scipione Maffei’s Merope. The players in that production were the Knights themselves, and the set was designed by the Knights` chief architect, Francois Mondion.
The management of the theatre and the censorship of the performances was in the hands of a knight who was called “Il Protettore”.
In those days, opera performed by professionals was performed at least as often as drama. Works by the great master of "opera seria" Johann Adolf Hasse were often performed during the theatre’s early decades, but just as popular throughout the century was the rival "opera buffa" by leading composers like Nicolo` Piccinni, Baldassare Galuppi and Domenico Cimarosa.
The continuous theatrical exchange between Naples, Palermo and Valletta made Teatru Manoel a natural stepping stone for aspiring artists `to step up the ladder leading to Teatro alla La Scala or Royal Opera House Covent Garden.