In 1947, E. L. Bryan and the Foy Arrington Family bought a surplus military Quonset hut, one of thousands of the all-purpose metal buildings made during World War II. The Hut was moved to Rockdale to become the core of the second movie theater in town. Local carpenter Jack Kyle, Sr. directed several Rockdale High School students to build the sloping style Kay Theater, named for the Arringtons’ daughter, Katherine.

A half-cylinder of corrugated steel sheets forms the walls and roof. The entry includes a stepped plaster wall outlined in neon, an entry drum of plaster and glass blocks, paired double doors, a central sign and large letters spelling K - A - Y on each side of the rotunda.  The owners, Mr. And Mrs. Foy Arrington, said the quonset hut architecture "lends itself naturally to excellent acoustics and a pleasing interior appearance."

Construction of the Kay Theater was completed in time for a Thanksgiving 1947 opening. At a dedication ceremony the next night, Postmaster Clyde Franklin was Master of Ceremonies and Mayor J. B. Newton introduced "Rolling Home," starring Russell Hayden, Jean Parker and Raymond Hatton. Large box fans made the Theater one of few air conditioned locations in town. Mr Arrington manned the ticket booth and was the projectionist, and his wife managed the concessions. As with similar facilities at the time, African American patrons walked upstairs to separate balcony seating. 

The Kay Theater closed in 1962 and was vacant for many years.  In 2004, a group of concerned citizens formed The Friends of Kay Theater Foundation with the goal of buying and revitalizing the downtown theater.  In 2006, the Noack family donated the property and structure to The Kay Theater Foundation.  After renovating and restoring the building, The Kay Theater re-opened in 2010, and was recorded as a Texas Historic Landmark by the Texas Historic Commission in 2013.