The hotel staff innovated Lawrence Welk's now famous bubble machine, and it was the site of Bob Hope's marriage proposal in 1934.

Built from 1915 to 1916, the $6 million William Penn opened on March 11, 1916, in what newspapers hailed as the Grandest Hotel in the nation, its first night it hosted the annual Pittsburgh Chamber of Commerce Gala and was recorded as the largest gala in city history up to that time with U.S. Secretary of State Philander Knox hosting the event.

Eugene Eppley financed a major expansion in 1929, filling the remaining eastern half of the block, that made the William Penn the second largest hotel in the world.

The expansion brought the number of rooms to 1600[8] and included an Art Deco[9] ballroom atop the hotel conceived by noted designer Joseph Urban.

Sheraton sold the hotel on May 22, 1968 to Nomarl, a group of local investors, for $7.75 million[14] and the William Penn returned to its original name.