The outside of the Movie Palace has colorful floors and red doors leading to the inside. At both sides, movie posters are displayed on the wall. In the middle, the theater has a green ticket booth.
The inside is shown in "Fiasco!" where it has a big movie screen in the front, a section of seats on the left, an aisle, and another section of seats on the right. The walls are green and the seats are purple.
Mr. Krabs' main purpose of opening it is to get SpongeBob's penny (which he thought SpongeBob found). To enter, one needs to pay only one penny. The theater is popular, but not successful; however, since all Mr. Krabs had to offer the hopeful customers was a flip book made of dollar bills. After unsuccessfully trying to get SpongeBob's penny, Mr. Krabs destroys it, although it reappears in "Fiasco!" Mr. Krabs most likely sold the blueprints and/or the material to the city.