The company was founded in 1947 by Albert M. Mercer, K. Linwood Stauffer and Robert Faust, hobbyists who believed that most of the model railroad equipment produced at that time lacked realism.
Japan and Germany produced few due to the recently ended World War II, while the main United States train model brands at that time, Lionel Corp. and American Flyer, did not put as much authentic detail on their trains as their O and S gauges would have allowed.
Penn Line's early contribution to model railroading was the use of printer's lead to cast the locomotives.
They produced a nicely detailed, but poorly powered Indianapolis-style set endorsed by A. J. Foyt.
Most of the former Penn Line Pennsylvania Railroad die-cast steam locomotive kits were later produced by Bowser Manufacturing, and are still available in 2007.