Originally constructed as a hotel, the building that now contains the Bijou Theatre is oldest commercial structure in Knoxville still in commercial use. The building opened as the Knoxville Hotel in 1817 and operated as a hotel for nearly a century. During the Civil War, the hotel, then the Lamar Hotel, served as a hospital and it was here that Union General William P. Sanders died. Possibly some of the deaths and trauma that occurred during this time has left an impression on the building. The hotel was converted into a theatre in 1909 and has hosted live theatre and operated as a pornographic movie house in the 1960s and 70s. Preservationists restored the building for use as a theatre and it remains as such today.
It appears that multiple spirits remain in the theatre. In addition to performers and patrons who have had experiences in the theatre ranging from voices to apparitions, paranormal investigators have recorded EVPs and captured activity on film and video. Among the spirits that apparently haunt the building are a young girl, a stage technician, The General (possibly the spirit of General Sanders) and a construction worker.