When the Capitol Theatre opened its doors in early 1927, films with synchronized sound were only beginning to be released. In 1926, the Pottstown Theatre Company signed a contract with M.P. Moller of Hagerstown to build an instrument for their newest theatre, at a cost of $10,000. Organist Wilfred Binder was brought in from Pottstown to accompany silent films on the organ and he would continue to play as needed for most of the rest of his life. When sound projection equipment was installed in the 30’s, the organ's role changed to providing music before films and for special events. The organ was well used and maintained into the 50’s, and even briefly served the congregation of Central Presbyterian Church in 1938 when a fire destroyed their sanctuary. By the late 50’s the organ had fallen into disuse and the console was covered up.

In the summer of 1972 house organist Bob Eyer and a friend began the work of reviving the organ with advice from Peter Daniels at M.P. Moller. Funding was non-existent, but little by little they were able to get the organ playable and pre-show music for movies and community events resumed for the first time in many years.

In 1980 California-based organ enthusiast and pilot Gordon Madison saw an ad in a theatre organ magazine that the Capitol was for sale and included a pipe organ. Gordon decided that reviving the Capitol would make an ideal project for himself and he bought the organ and the theatre that came with it. Also in 1980, Mark Cooley was hired as manager and projectionist and became head of the organ crew.

By the mid 80’s parts of the organ had begun failing more quickly than they could be fixed, and planning began for a full removal and rebuild of the organ. By the early 90’s an organ shop was created in one of the vacant apartments over the lobby and the organ was taken out for work. A choice was made to enlarge the organ by one manual (keyboard) and five ranks (sets) of pipes. A state of the art computerized control system was donated by local Anna Evans and was among the first of its kind to be installed on the east coast. Among the many people who worked on the organ project in this period were John McBride, Nelson Rotz, John Hooper, Gil Singer and Dean Faulk.

In 2025 the Gilmour-Hoerner Endowment generously made a grant to update the control system to again bring it completely up to date. Improvements and changes are still ongoing and the organ can still be heard periodically at public community events. The Capitol’s organ is one of about ten Moller theatre organs left and is now the only playable original theatre pipe organ installation in the state of Pennsylvania.