After Sir Henry Pellatt left Casa Loma, it remained vacant while proposals were considered for the future use. In 1925, one year after Sir Henry Pellatt retired to his farm in King, architect William Sparling put forward a proposal to convert the house to a luxury hotel.

William Sparling was granted a long-term lease and began the process of completing the Great Hall and the Billiard Room, areas that Sir Henry Pellatt had never finished. He also had plans to add two large wings to the east and west sections of the main building that would each contain 96 full suites and 56 rooms. These wings were never built. A New York syndicate offered to purchase Casa Loma in 1928 but the deal was never completed and the hotel failed in 1929.

During the late 1920's, Casa Loma was also a popular nightspot. The Orange Blossoms, later known as Glen Gray and the Casa Loma Orchestra, were booked to play for eight months at Casa Loma in 1927 and 1928. Shortly thereafter, they went on tour of North America with their big band sound.

With the onset of the Depression, Casa Loma once again remained vacant. In 1933, the city of Toronto took ownership of the property for $27,303.45 owed in back taxes. Suggestions for possible uses of the building included a highschool, museum, art gallery, a war veteran's convalescence home and a permanent residence for the Dionne quintuplets. None of the projects proved feasible and the City of Toronto considered demolishing Casa Loma. The Kiwanis Club of West Toronto began operating Casa Loma as a tourist attraction in 1937. This agreement continued until 2011.

In August 2011, the new Casa Loma Corporation was formed. The City of Toronto remains the sole owner of the site.

In January 2014, the Liberty Entertainment Group led by Nick Di Donato entered into a long term Lease and Operating Agreement with the City of Toronto for Casa Loma. This includes all aspects of the operation of Casa Loma as both a special event facility as well as an attraction. The Liberty Entertainment Group plans to preserve and make improvements to the facility, enhance the special events and dining experience and integrate new technology for school and cultural programming.