On January 15, 1934, a fire caused considerable damage to the theatre.
The fire is believed to have started from a burning cigarette thrust against the motion picture screen.
The fires started at the lower right corner of the picture screen and spread rapidly to the scenery.
 The people at the theatre were unaware that there was a fire.
The asbestos curtain was dropped hurriedly and kept the flames back stage.
Firemen battled the flames for more than an hour.
The Betsy Ross scenery, two complete scenery sets and 56 sets of line were destroyed.
Sound equipment and screens were destroyed at a cost of estimated at $5,000.
Insurance covered the cost of the damages.

On January 17, 1934, the Murphy Theatre re-opened.
New 'talkies' equipment and a new and larger picture screen were installed.

Notably, local filmmaker Kroger Babb's controversial 1945 exploitation film Mom and Dad was shown several times in the Murphy Theatre, featuring live appearances by "hygiene commentator" Elliott Forbes, played by various Wilmington residents.
Mom and Dad was added to the National Film Registry in 2005, due to its distinction as "[t]he most successful sex-hygiene exploitation film of all time, a low budget but relentlessly promoted, socially significant film, which finished as the third highest grossing film during the 1940s."
On January 15, 1934, a fire caused considerable damage to the theatre. The fire is believed to have started from a burning cigarette thrust against the motion picture screen. The fires started at the lower right corner of the picture screen and spread rapidly to the scenery.  The people at the theatre were unaware that there was a fire. The asbestos curtain was dropped hurriedly and kept the flames back stage. Firemen battled the flames for more than an hour. The Betsy Ross scenery, two complete scenery sets and 56 sets of line were destroyed. Sound equipment and screens were destroyed at a cost of estimated at $5,000. Insurance covered the cost of the damages.
On January 17, 1934, the Murphy Theatre re-opened. New 'talkies' equipment and a new and larger picture screen were installed.
Notably, local filmmaker Kroger Babb's controversial 1945 exploitation film Mom and Dad was shown several times in the Murphy Theatre, featuring live appearances by "hygiene commentator" Elliott Forbes, played by various Wilmington residents. Mom and Dad was added to the National Film Registry in 2005, due to its distinction as "[t]he most successful sex-hygiene exploitation film of all time, a low budget but relentlessly promoted, socially significant film, which finished as the third highest grossing film during the 1940s."
Murphy Theatre