It is at the center of the Northeast Corridor, a passenger rail line that connects New York City with Boston to its north and Philadelphia, Baltimore, and Washington, D.C. to its south, along with various intermediate stations.

The New York Times editorial board described the demolition of the original station as a "monumental act of vandalism",[7] and its destruction galvanized the modern historic preservation movement.

In 1901, PRR president Alexander Cassatt announced the railroad's plan to enter New York City by tunneling under the Hudson and building a grand station on the West Side of Manhattan south of 34th Street.

[21] The station put the Pennsylvania Railroad at comparative advantage to its competitors offering direct service from Manhattan to the west and south.

[21] By the late 1950s, intercity rail passenger volumes had declined dramatically with the coming of the Jet Age and the Interstate Highway System.

Modern architects rushed to save the ornate building, but to no avail;[31] demolition of the above-ground head house began in October 1963.

[35] The controversy over the demolition of such a well-known landmark, and its deplored replacement,[36] is often cited as a catalyst for the architectural preservation movement in the United States.

[39] In 1987, a rail connection to the West Side Rail Yard opened,[40] and in 1991, the opening of the Empire Connection allowed Amtrak to consolidate all of its New York City trains at Penn Station and save $600,000 a year in fees;[41][42][43] previously, trains from the Empire Corridor terminated at Grand Central Terminal, a legacy of the two stations' respective roots in separate railroads.

In 1994, the station was renovated to add the 34th Street LIRR entrance and central corridor, along with artwork and improved waiting and concession areas.

[44] The new entrance consisted of a 90-foot-tall (27 m) structure with a glass and brick facade, a clock salvaged from the original station, and air-conditioning units for the terminal.

[47][50] In 2020, the ticketed waiting room on the main concourse was renovated by Amtrak and NJ Transit to include furniture with USB outlets, an additional entrance, and a lactation suite.

[54] Despite the modest renovations, the underground Penn Station continued to be criticized as "reviled", "dysfunctional", and a low-ceilinged "catacomb" lacking charm, especially when compared to the much larger and more ornate Grand Central Terminal.

[61] The $1.6 billion, 255,000-square-foot (23,700 m2) renovation retained the original, landmarked Beaux Arts Farley Building, added a central atrium with a glass roof, and provided access to Amtrak and LIRR trains.

[69] 33rd Street between Seventh and Eighth Avenues was converted into a pedestrian plaza and permanently closed to vehicular traffic,[70] opening in June 2024[71][72] as part of a $65 million project funded by Vornado.

This new capacity, as well as track connections resulting from the East Side Access project, will allow Metro-North trains on the New Haven Line to run to Penn Station via Amtrak's Hell Gate Bridge.

[84] Four new local Metro-North stations in the Bronx are planned as part of this project, at Co-op City, Morris Park, Parkchester/VanNest, and Hunts Point.

[88] The main concourse, now primarily used by NJ Transit which was principally used by Amtrak until the opening of the Moynihan Train Hall in 2021, is at the west end of the station directly beneath Madison Square Garden.

It was renovated in the early 2000s in anticipation of Acela service and includes an enclosed waiting area for ticketed passengers with seats, outlets and Wi-Fi.

[92] Significant renovations were made to the LIRR areas over a three-year period ending in 1994,[93] including the opening of the Central Corridor passageway and the addition of a new entry pavilion on 34th Street.

[109] This caused four days of reduced service along the Northeast Corridor for both Amtrak and NJ Transit, because the incident damaged the switch that connects Tracks 1–8 to the North River tunnels.

[111] This closure caused a cascading failure, delaying Amtrak and Long Island Rail Road trains on the unaffected tracks.

[110][112] On April 14, a New Jersey Transit train became stuck in the North River tunnels, causing the station to grow crowded with waiting passengers.

After an Amtrak police officer used a Taser on a man who was acting disruptively, rumors of gunshots sparked a stampede that injured 16 people.

[130][131] In June 2023, nearing the end of the ten-year permit granted in 2013, the MTA, along with Amtrak and NJ Transit, filed a report stating that Madison Square Garden is no longer compatible with Penn Station, saying, "MSG's existing configuration and property boundaries impose severe constraints on the station that impede the safe and efficient movement of passengers and restrict efforts to implement improvements, particularly at the street and platform levels.

[137] The new tracks would connect to and take advantage of the new capacity provided by the Hudson River tunnels built as part of the Gateway Program.

[139] In April 2021, MTA officials under governor Andrew Cuomo proposed two options to reconstruct the Penn Station building under Madison Square Garden, to be financed by the development of 10 new office and residential towers in the surrounding neighborhood.

[140][141][13] Opponents alleged the tower development would disproportionately benefit real-estate firm Vornado Realty Trust, which would redevelop several buildings without paying property taxes.

[142][143] In November 2021, after Cuomo resigned, governor Kathy Hochul announced plans to hasten the reconstruction to take place before construction of a southern annex, and to slightly reduce the size of the office tower development.

Two new tunnels would add 25 cross-Hudson train slots during rush hours and could connect to a 7-track, 4-platform terminal annex to Penn Station to its south.

[155] Construction of a "tunnel box" that would preserve right-of-way on Manhattan's West Side began in September 2013, using $185 million in recovery and resilience funding awarded after Hurricane Sandy in 2012.