The Coliseum in Porthmadog closed in 2011 because of falling attendances after 80 years of entertaining the crowds.
Gwynedd council voted to demolish it in September - despite 300 people objecting to the plan.
Work to flatten the building began on Monday, with the walls demolished on Tuesday.
There had been calls for the 1930s cinema to be given listed-building status, however, developers said it needed to be flattened.
A council report said experts had ruled out giving the building protected, status despite it being of some "historic interest".
The demolition of an art deco cinema in Gwynedd - which faced opposition from hundreds of people - has begun.