In 1864 English resident Charles Simeon sold 42 acres at the foot of Colombo Road (now Colombo Street) to brewer and landowner Richard Packer. Packer built a homestead 'Somerfield' on part of the block, and in July 1866 leased 5 acres beside the Heathcote to his brother-in-law Rogers Deacon and the latter's business partner William Vincent (1832-1901), for 21 years at £75 p/a. In November 1866 Deacon and Vincent took a mortgage for £1,200, probably to fund the construction of a malthouse on the site to provide for their City Brewery (1861 or 1862), a mile further north on Colombo Road.

The malting of barley is central to the production of beer. The traditional malting process had three stages: steeping, germination and kilning. Barley was initially soaked or 'steeped' in water in large vessels. Then it was spread on long malting floors, to be turned frequently by shovel until germination took place. Germination converts the barley's starch to sugar. After about five days the sprouted barley was spread on a drying floor in a kiln or 'oast', where heat from a furnace flue stopped germination and developed flavour and colour. The finished product was removed after about a day, to serve as one of the constituent ingredients of beer. Some breweries maintained their own malthouses on site, but it was not uncommon for malt production to be outsourced.

The Deacon/Vincent partnership was dissolved in March 1867, but resumed in July of that year. In the intervening period, Deacon took a mortgage with Packer for £500 - perhaps to complete the malthouse building. The Lyttelton Times reported in 1869 that the partners had spent in excess of £2,000 erecting 'one of the finest malthouses in New Zealand'. Deacon and Vincent renewed their lease on 30 May 1870, and on 1 June took a mortgage with Packer for a further £1,000. In 1869 or 1870 an additional oasthouse was added beside the existing one on the south elevation. This increased the capacity of the malthouse to 20,000 bushels per annum, and may have been built to provide for the Victoria Brewery in Windmill Road (Antigua Street) that Deacon acquired around this time. Deacon and Vincent's partnership was dissolved again - this time permanently - in March 1871, with Vincent carrying on the business on his own account under the moniker Vincent and Co.

Packer died in 1872, and the following year Vincent and new business partner Charles Todhunter (1838-1916) purchased the freehold of the malthouse and its five acre block. At the time Todhunter had just returned from an extended sojourn in Britain, where he had studied brewing. The pair rebuilt the City Brewery in 1875, but in 1877 Todhunter departed for another extended trip. In 1878 the partnership sold the malthouse and half an acre to the manager of Wards' Brewery, Richard Steele. Steele sold to Arthur Empson and Alexander Boyle in 1882. Boyle, a founder of stock and station agents Pyne and Co., and later chair of the board of Pyne Gould and Guinness, bought Empson's share in 1884. A corrugated iron lean-to with a stone and concrete basement was added to the north elevation about 1887.

In 1889 the Wigram Bros. maltworks in Heathcote secured several large contracts with brewers in Australia. This increased demand exceeded the capacity of the Wigram works, and a number of other malthouses were leased. In 1891 Boyle leased the City Malthouse (as it was by then known) to Henry Wigram for three years with a right to purchase. With extensions, Wigram's own works were eventually able to meet demand, and the other malthouse leases were given up. Brewer Samuel Manning and Co. bought the property from Boyle in 1903; a purchase that coincided with a national upturn in malting after several years of slump.

In 1923 ten breweries throughout the country merged to form New Zealand Breweries. In Christchurch, Mannings' joined with Wards' and Crown. The old City Malthouse thus became part of the nationwide conglomerate. In 1947 the Canterbury Malting Co. Ltd. was formed at Wigram's old Heathcote maltworks, and a rapid expansion of that site took place. Following the opening of a new malthouse at Heathcote in 1953, major shareholder New Zealand Breweries was able to close its own obsolete malthouses down. Malting at the City Malthouse ceased about this time and the building was sold in 1955 to grain and seed merchants Aysons Seed Co., to be used for storage. Aysons lowered the oasthouse ventilators and removed the brick furnaces. Part of the building was also used as a depot by building firm S. A. England.

In 1965 amateur theatre group Canterbury Children's Theatre purchased the building, naming it The Malthouse. The Canterbury Children's Theatre was founded in 1952 with the objective of presenting theatre to families. Over the last 50 years the company has introduced live theatre to thousands of Christchurch children. Between 1966 and 1969 architect John Hendry remodelled the interior and made a concrete block addition to the north elevation to create performance space, storage and toilet facilities. Following a QEII Arts Council grant in 1975 extensive renovation of the two oasthouses was undertaken during 1976, again by Hendry, to provide wardrobe storage, set construction areas and a greenroom. During 1984 a window opening was enlarged, and a new interior access stair and sprinkler system installed. Major internal renovations were proposed in 1993. A resource consent was issued in 1994 but the project was not implemented. Part of the roof of the 1887 addition was raised in 2000 to provide more space. Seismic strengthening was undertaken in 2003 by architects Wilkie and Bruce. The remainder of the roof of the 1887 addition was also lifted at this time. The former manager's cottage sits adjacent to the south elevation of the building, and has been owned by the theatre since 1966.