Harlem's Apollo Theater, its doors closed for more than two years, opened for business again over the weekend.

The revival of the showcase for black entertainers, where the likes of Billie Holiday, Ella Fitzgerald, Duke Ellington, Aretha Franklin, James Brown and Stevie Wonder either had their debuts or gained their credibility, was for many a sign of hope. The area where commerce and night life once thrived has slowly been reduced to ashes.

On Friday night, a line of limousines former in front of the theater, directly across from a five-story burned-out building. Police and security guards ushered local politician, models, athletes and musicians through a swarm of television cameras and microphones.

Gladys Knight, Wilson Pickett, Willis Reed, Paul Simon, Harlem Rep. Charles Rangel and others made their way past a host of youths hawking Apollo T-shirts, rhinestone rings and an array of drugs.

The refurbished, 1,600-seat house, featuring for its grand opening percussionist Ralph McDonald and Friends, was nearly sold out. The lines of people, about 80 percent black, trailed down 125th Street.

Many Harlem residents, young and old, pushed up against the police barricade under the marquee to watch the stars arrive in the chilly night.

"Harlem has come alive," said an elderly black woman, who had just come to watch the opening. "I wouldn't have missed this for anything. This street has been dead for two years."

Inside, McDonald had a way with the crowd. Dressed in a sleek, white body suit, splashed on the legs and back with glitter birds, he talked to an audience of mixed ethnic and economic backgrounds as though he were at ease with all of them.

The four-hour show - which included jazz, Latin disco music, West Indian compositions, African dancing and soul - seemed to support McDonald's claim that he would "bring the world back to Harlem."

When a few hecklers in the balcony shouted, "Sing some soul, brother," he knew how to cajole them. When a stage hand whispered in his ear that a neighborhood store was being robbed, he simply laughed, asked if the merchant was in the audience, and said, "The brothers have got to your store."

Among the dozens of "friends" McDonald brought together for the show were flutist Bobby Humphrey, who got her start at the Apollo, Toots Theilmanns, a Belgian jazz harmonica virtuoso, and a South African dance and vocal group called the Soweto Six, which drew the only standing ovation from the crowd all night.

For the first time in its 44-years history the Apollo is under all-black ownership. Elmer T. Morris, a 34-year-old former police officer from Harlem, is the president and part owner of the operation, together with a group of unnamed "communisty backers" called the 253 Corporation.

"Any big-name black star, from Ray Charles to Sammy Davis Jr., came through these doors," said Morris. "The Apollo Theater is bigger than me, bigger than any of us. It's an institution, just like the Senate is in Washington."

"In the '30s and '40s," recalled David McCarthy, who has been affiliated with the theater for 10 years, "the Apollo was the only place where blacks were allowed to entertain for blacks. There were certain restaurants and clubs on this street where blacks either had to enter through the back door or weren't allowed in at all. It wasn't until Adam Clayton Powell marched through here in the '40s that things began to change."

A family operation for 32 years, the Apollo rose gloriously from the 1930s on. Harlem gained world-wide acclaim and 125th Street became a traditional stop on the tourist route. But the deterioration of the neighborhood went hand in hand with the fall of the theater, and in February 1976 the sons of the original owners turned the lights off.

"We want to turn the lights back on," said Neal Tate, the Apollo's musical director.

Tate, who played back-up piano for Billie Holiday, Billie Epstein, Dionne Warwick and many others during his 20 years at the Apollo, recalled what it was like in the "old days."

"There was always something happening on this block. There were clubs and live music through the whole street. Now it's dark. You walk up here at night and there are no lights. There is no music," he said.

Two months ago Morris and his backers bought the property from Walter Bretcher and Robert Shiffman for a purchase price of about $250,000. "It's not that we had that much cash, though. I wish we did,' Morris said.

With "limited funds and a lot of volunteer help from friends," Morris refurbished the Apollo. The entire place has been painted, the stage and dressing rooms rebuilt, the chairs reupholstered and the floors carpeted wall to wall.

Gladys Knight, who first appeared at the Apollo with the Pips in 1961 and later made at least three appearances there every year, was optimistic about the re-opening.

"After the show at night," she said, "I used to go back into the theater. Just standing there alone, you have a different feeling. The souls and the spirits of the people who have been there are part of the theater. And I used to feel like now I'm adding my soul and my spirit to all of these great people. I used to think that all of these spirits came out and had a big party after the people left."

James Brown, who like Gladys Knight was a long-time favorite at the Apollo, said on the telephone from Detroit, where he is performing, that he was very proud" about the re-opening.

And like Knight, he said he would like to do a show at the Apollo later on this year. "It would be a major homecoming for me. It would be like repeating the past.

"I would like to see the white audience come back to the Apollo and feel safe there. It's not just for blacks," he said.

Besides the physical rehabilitation of the building, McCarthy, the theater's general manager, has arranged for additional security during the performances. Theater employes wearing jackets marked "Apollo Security" were stationed in front of the theater. About 10 policemen, "six more than usual," said one officer, also were assigned to patrol the block.

Once inside the theater, the audience seemed to feel at home. Ralph McDonald, who was born eight blocks from the theater, agreed to do the five opening performances at a cut under his usual fee.

"I was lucky to leave Harlem when I was 17 to play percussion for Harry Belafonte," he said. "At a young age I performed for kings and queens. This community gave me the fundamentals I went out into the world with, and now I can bring something home to the community."

The Apollo staff is banking on the community for support. And area merchants are banking on the Apollo's success. "When the Apollo closed down, business on this block dropped 40 percent," said Jim Davis, owner of the Showman's Restaurant next door to the Apollo. "My restaurant will only survive if the Apollo does. I'm depending on it."

Meanwhile, opening night's Apollo audience - "the toughest audience in the world," according to Gladys Knight - was generally orderly. The ushers overlooked the marijuana smokers in the third tier, but were firm about keeping everyone in his seat.

"The days of everyone jumping up onthe stage to dance with the performers are over," said one usher, "but other than this, the Apollo is the same a s it always was. They never should have closed it down."