The Little Theatre exists because three women decided that culture mattered enough to keep building it through a war. Ruth Dodds had been active in the Gateshead branch of the Independent Labour Party since the 1920s and had helped to found the resident company, the Progressive Players, in 1920. Her sister M. Hope Dodds joined her in funding the building. The plot they acquired in 1939, on Saltwell View, would have housed numbers 1 and 2 of a planned terrace; number 3 was purchased and folded straight into the new structure. The political roots of the Progressive Players are written into the building's foundations, though the company has long since stepped away from any party. What endures is the conviction that a working town deserves its own stage.

In the 1920s, before the theatre existed, the Progressive Players sent a delegate to a British Drama League meeting clutching a royalty payment for George Bernard Shaw. The sum was seven shillings and fourpence, the playwright's cut of takings on Pygmalion that had reached the grand total of sixteen pounds. Shaw is supposed to have accepted the money and advised the Progressives to turn themselves into a company. They followed his advice. A century later the company still produces ten plays a year, and the theatre celebrated its centenary in 2020 with the muted dignity of a pandemic. The first show back after the 19-month lockdown was Lockdown in Little Grimley, in October 2021.

Every old theatre has its near-death story, and Saltwell View's came in the 1960s and 1970s when the threat of compulsory purchase and demolition for a new road hung over everything. The road never came. When the threat lifted, the Players bought number 4 of the terrace in 1989 to ease overcrowding, then poured a legacy from former member Jim Ord into the frontage and foyer in 2012 and 2013. Further work in 2015 added a dressing room and an archival office. During the COVID closure they completed funding for an extension that opened in October 2021, creating a new studio space for rehearsals and the occasional cabaret. The building is largely self-supporting, hired out between productions to schools, choirs and any other society that needs a stage.

Coordinates 54.95 N, 1.60 W in central Gateshead, directly opposite the green expanse of Saltwell Park. Recommended viewing altitude 1,500 to 3,000 feet. The theatre is a modest building among terraced streets; the park's distinctive Saltwell Towers with its red-brick turrets is the easiest visual landmark, with the Little Theatre on its eastern edge. Nearest ICAO airport Newcastle International (EGNT) is 6 nautical miles north-west. Durham Tees Valley (EGNV) lies 22 nautical miles south.