The Electric Theatre was opened in Ackworth in 1915 and closed for good in 1929.
Ackworth Heritage Group has now added the Wakefield Road building it to their growing list of significant buildings, erecting the plaque on its front wall.
Pauline Lockett, chairwoman of the group said: “We thought it deserved a plaque because there are so many people moving to this area who have no idea about its history.
“In its day I’m sure it would have been very modern.”
The theatre, which could seat up to 220 people, was built as an extension to the existing working men’s club, which had opened in 1907 at a cost of £1,750.
The theatre staged live performances, and screened silent films, to which a local female pianist would accompany the movie.
However, it ran into trouble in the late 1920s when health and safety issues were raised, including inadequate fire safety and lack of public toilet provisions.
As a result, a cinematograph licence was denied and it never screened another film.
Paul Venton, secretary to Ackworth Heritage Group, said: “My father used to tell me that when it was full, the ceiling used to be covered in condensation!
“It’s very important [to put the blue plaque up].
“Like a lot of places we are getting a lot of new housing and the history is slowly disappearing, but I’m sure there are people that would be interested in what went on here.”
The theatre became a garment factory, and later a gym which operates today.
The working men’s club eventually closed also, and is now a restaurant named The Electric Theatre, in homage to its past.