Sid Grauman commissioned the Chinese Theater on the heels of success with his first Hollywood movie house, Grauman's Egyptian (1922). Grauman opened the Chinese on May 18, 1927 with a gala premiere of Cecil B. DeMille's film The King of Kings.

The scene of many premieres over the years, the Chinese quickly became one of THE places for celebrities to be seen in Tinsel Town. A natural-born promoter, Grauman knew how to attract attention to his ventures. He was, for example, the first theater owner to use searchlights as a means of promoting events.

Another of Grauman's successful promotion was the inclusion of celebrity hand and footprints in the forecourt of the Chinese. The tradition supposedly began by accident when Norma Talmadge stepped in wet cement. Whether started by accident or not, the Chinese Theater's print collection ultimately grew from those of Talmadge, Mary Pickford and Douglas Fairbanks to nearly 200, and is a popular tourist attraction to this day (6925 Hollywood Boulevard).

Sid Grauman sold his share to William Fox's Fox Theaters chain in 1929, but remained as the theater's Managing Director until his death in 1950. In 1973 the facility was purchased by Ted Mann, owner of the Mann Theaters chain. From then until 2001 it was known as Mann's Chinese Theater. In 2000 the theater was sold to a partnership of Warner Bros. and Paramount Pictures. In 2002 the landmark's name was restored to Grauman's Chinese Theater.