The community came to prominence as a resort in the 20th century after the construction of Pen Mar Park by the Western Maryland Railway.

[3]: 7  Not only did the Western Maryland Railroad develop a resort but also an amusement park that included a scenic lookout, roller coaster, movie theater, dance pavilion, picnic shelter, miniature train, photo studio, concession stand, carousel with a penny arcade, dining hall and children's playground.

[4] The park was a huge success with thousands of visitors taking the 71-mile trip from Baltimore to Pen Mar.

The town of Pen Mar was officially incorporated in 1920[5] with an act to add new sections to Article 22 of the code of public laws of Maryland.

The Pen Mar post office officially closed in the 1960s and the area slowly dwindled in size and stature within the state of Maryland.

In 1953 a petition was circulated in the Pen Mar community, in support of creating a state park at the former resort site.