The economic downturn of the Great Depression forced Schiffman and Brechler to close the Lafayette in 1934. During the New Deal era, however, it was revived as a legitimate theater for the Federal Theater Project (FTP) of the Works Progress Administration; from 1935 to 1939 it served as the headquarters of FTP’s New York Negro Unit. During this period the Lafayette became famous as the theater where Orson Welles’s production of a “voodoo” Macbeth (1936) was staged. This was an adaptation of Shakespeare’s play set in Haiti in the 1820s and included elements of African American and Afro-Caribbean culture. In 1939 the Lafayette was turned into a movie theater; eventually, it was turned into a church. A black theater impresario, Robert Macbeth, revived the Lafayette’s dramatic tradition in 1966, when he leased a wing of the building and founded the New Lafayette Theater. The Lafayette Theater seated 2,000 patrons, and its audiences were almost exclusively African American. Productions offered there followed the typical stock repertoire schedule, with a bill that changed weekly and with daily matinee and evening performances on Monday through Saturday. On Fridays an additional midnight show lasted until four o’clock in the morning. Wallace Thurman vividly recalled the lively atmosphere of these shows, which usually attracted a noisy crowd, turning the auditorium itself into a stage. The Lafayette offered a wide range of productions. The Lafayette Players regularly presented abridged versions of Broadway comedies and melodramas as well as classics, such as Within the Law (1915–1916), Madame X (1916–1917), and Dr. Jekyll and Mr. Hyde (1916–1917). In 1916 the Lafayette Theater participated in the tercentenary celebrations of Shakespeare’s death with a production of Othello, and in 1923 the theater was host to productions of The Comedy of Errors and The Taming of the Shrew performed by the Ethiopian Players, a company based in Chicago. The Lafayette’s fame, however, rested mainly on its productions of musical revues, such as Porter Grainger and Fredie Johnson’s Aces and Queens (1925), and Mississippi Days (1928), starring Bessie Smith. Many of the shows presented at the Lafayette were simply replicas of recent Broadway hits. A popular success could also inspire new versions; Lew Leslie’s Plantation Revue (1922), for instance, was immediately modified and revived as Club Alabam during the same season.

Although reviews of the productions at the Lafayette were generally favorable, progressive theater critics, writers, and intellectuals, such as Theophilus Lewis, Lester Walton, Wallace Thurman, and Harold Cruse, complained that the Lafayette was too “white” in the content and style of its presentations. In those days, however, legitimate drama that dealt seriously with black life and race relations was rare. Thus, not only criticism of its policies but also time was needed before the Lafayette began to produce works by African American playwrights, such as Andrew Bishop’s It Happened in Harlem (1918) and Frank Wilson’s Pa Williams’s Gal (1923). Critics also objected to the Lafayette’s practice of casting mostly light-skinned performers who might pass for white. There were no dark-complexioned chorus girls at the Lafayette, and dark-skinned actors occasionally whitened their faces for performances. Although the Lafayette Theater never resolved the tension between the taste of its mass audience and the aesthetic or political demands of some of its critics, it did have a prominent place in the cultural life of Harlem during the 1910s and 1920s, and it was widely acclaimed by patrons and reviewers alike. As a completely black-operated house offering employment and theatrical training to a generation of African American actors, the Lafayette came to represent a “focal point of ethnic pride” (Vorder Brugge 1987, 254) for Harlem’s black community