The building is located in the center of Sweden's capital Stockholm in the borough of Norrmalm, on the eastern side of Gustav Adolfs torg across from the former Arvfurstens Palats, now Ministry for Foreign Affairs. It lies on the north side of the Norrström river and is connected to the Royal Palace through the Norrbro bridge.

Further historically as well as architecturally important buildings in the close neighborhood are the Sager House, official residence of the Prime Minister of Sweden, and the Riksdag building.

The opera company was founded by King Gustav III and its first performance, Thetis and Phelée with Carl Stenborg and Elisabeth Olin, was given on January 18, 1773; this was the first native speaking opera performed in Sweden.

But the first opera house was not opened until 1782 and served for a century before being replaced at the end of the 19th century. Both houses are officially called the "Royal Opera", however the terms "The Gustavian Opera" and "The Oscarian Opera", or the "Old" and "New" Opera are used when distinction is needed.