Members of staff at the Playhouse claim to have seen a huge beast wandering through the corridors of the theatre and across Williamson Square.
Some even suggest the beast is linked to the mysterious death of Sir Charles Baskerville.
Playhouse bosses have reassured staff and the public by hiring a top private detective team to investigate the mystery.
Liverpool residents have been asked to remain calm, but are warned to be on the lookout for a hideous fanged beast near the Playhouse.