By the early 1980s, after the theater closed down, the threat of demolition loomed. Maui Community theater first occupied the theater in 1984 for $200 a month, and community efforts commenced to help save the Iao from demolition. In July 1993, Maui County paid $882,000 to buy the site and the theater itself from the Lyons family trust after plans to demolish or convert the theater for other purposes materialized and spent $1.8 million on a partial restoration. The Hawaii State Register of Historic Places listed the Iao on June 24, 1994. It is the only surviving historic theater on Maui. The Department of the Interior placed the theater onto the National Register of Historic Places on February 9, 1995.