The theatre was built in 1888 and named Tivoli-Theater. Soon, it was renamed to Concerthaus Flora, and eventually became the Flora-Theater. It was used for concerts, operettas and revues. Being one of the few theatres in Hamburg not damaged in World War II, it continued to host performances until 1943. During the last few years of the war, the theatre was closed and used for storage, but it soon reopened after a renovation in 1949. From 1953 to 1964, the building was used as a cinema with around 800 seats; the department store 1000 Töpfe then moved in and remained until 1987.
The Rote Flora hosts exhibitions by artists from all over the world, organises flea markets, parties and cultural events regularly and also serves as a meeting point for left-wing movements. It was used as a convergence center during the protests against the 2007 G8 summit and has been the site of several congresses and political meetings. Political issues include immigration, nationalism in Germany and privatisation of public space. The front part of the building still serves as a space for political, often very subjective and propagandistic, messages. The Rote Flora is mainly financed through donations and parties; mainstream music is not played, instead, the Rote Flora offers a wide range of alternative music such as punk, reggae, ska, dub, drum 'n' bass and goa.
In the last few years, the Rote Flora has demonstrated its importance as an alternative cultural centre for the Schanzenviertel.