The Pennsylvania Railroad announced the construction of a hotel on Seventh Avenue in 1916, six years after completing the original New York Penn Station.

Above the fourth story, the facade was made of buff-colored and gray brick, and the hotel building was divided into four wings that faced south toward 32nd Street.

The public rooms were largely on the lower floors and included a ground-level lobby, a restaurant called the Cafe Rouge, and a ballroom level.

In the late 19th century, the site around the Hotel Pennsylvania was mostly residential, with three- and four-story row houses and four- and five-story tenements.

[29] Statler planned to rent rooms within a relatively narrow price range, saying: "I am working on the assumption that New York wants a first-class hotel where the ratio between the minimum and maximum rates will be nearer together than is usually the case.

[31] The Pennsylvania's 2,200 guest rooms and baths made it the largest hotel in the world at the time; it was slightly larger than the Commodore, which opened a few days later on January 28.

[54] The hotel continued to host large events in the 1930s, including ping-pong matches,[55] home equipment exhibitions,[56] National Board of Review conferences,[57] and architects' conventions.

[102] Hirschfeld had installed Lover's Bench, a bronze sculpture depicting a nude couple and a partly clothed woman, outside the Pennsylvania's entrance.

[105][107] At the end of June 1997, Vornado paid $75 million to terminate the Rieses' lease and acquire several buildings that the family owned nearby.

[109][110] The Official All Star Hotel plan was announced amid a revival in tourism in New York City,[111] as well as demand for office space in Penn Plaza.

[138] At a conference call in June 2008, Vornado chairman Steven Roth said he was considering downsizing his planned development or renovating the Hotel Pennsylvania.

[158] In the hotel's final years, the mezzanine levels above the lobby were operated as a separate business, the Penn Plaza Pavilion, a series of raw spaces used as function facilities.

[160] In March 2018, Vornado renewed special permits from the City Planning Commission to develop 15 Penn Plaza on the Hotel Pennsylvania's site.

In an April 2018 letter to investors, Roth mentioned the demolition and 15 Penn skyscraper plan as a continued option, but also described Vornado as being at "a tipping point" with regard to redeveloping the Pennsylvania into a "giant convention/entertainment hotel".

Christopher Bonanos of Curbed wrote: "Architecturally, it is like a lot of early-20th-century midsize hotels and office buildings around the city, only larger; it is surely a better-quality example from its period [...] Even if you're a hardcore preservationist, your energies might be better spent elsewhere.

"[160] The author and former landmarks commission member Roberta Gratz said, "If anyone thinks that another office tower is more useful than a creatively repurposed hotel as big and beautiful as the Pennsylvania, I don't know what to say.

[179] In July 2023, Steven Lepore of the Hotel Pennsylvania Preservation Society successfully negotiated with the owners to salvage an 8-foot (2.4 m) section of original staircase railing from the rear entrance lobby.

[182][183] The hotel's design was intended not only to complement that of the original Penn Station, which was demolished in 1963, but also that of the General Post Office one block west, which still exists.

[204] The first basement level also contained a direct entrance to the 34th Street–Penn Station on the New York City Subway's IRT Broadway–Seventh Avenue Line (later serving the 1, ​2, and ​3 trains).

[183] The mezzanine also contained the lounging and writing rooms, a library, a large exhibition space, a hairdresser's shop, and the maitre d'hotel's office.

[75] The mezzanine level floor was extended over the lobby, creating 30,000 sq ft of new exhibition space for conventions, giving the hotel the largest such facilities in the country at the time.

[97] East of the main lobby was the Tea Room, designed in the Adam style with arches and murals on the wall,[203][211] as well as mirrored panels, Chinese-style carpets, and a decorative plaster ceiling.

[99] The studio was used to tape television shows including The People's Court,[221] Idiot Savants,[222] Maury, Sally Jessy Raphael, 2 Minute Drill, and The Opposition with Jordan Klepper.

These allowed guests to give the valet their clothes to be pressed and shoes to be polished without fully opening the door,[21][183][225] as well enabling servants to deliver newspapers, room service, and other deliveres.

[227] Galveston crime boss Johnny Jack Nounes threw a $40,000 party at the Pennsylvania in the 1920s, inviting silent film stars Clara Bow and Nancy Carroll, who were said to have bathed in tubs of champagne.

[231] U.S. Army bacteriologist Frank Olson died after he crashed through a window on the 10th floor in 1953;[232] the U.S. government first described his death as a suicide, and then as misadventure, while others alleged that he was murdered.

[234][235] Gameel al-Batouti (who was first officer of EgyptAir Flight 990 when it crashed in 1999, killing all 217 people aboard) was reportedly sexually promiscuous with female staff[236] and was nearly banned from the hotel.

[74][246] Numerous acclaimed musicians performed at the Cafe Rouge, including Count Basie, the Dorsey Brothers, Duke Ellington, Glenn Miller, Artie Shaw, and Fred Waring.

One evening in November 1939, while in the midst of a steady long-term engagement at the Cafe Rouge, bandleader Artie Shaw left the bandstand between sets and decided to quit his own band on the spot.

[257] In 2014, the Cafe Rouge space was converted to an indoor basketball court known as Terminal 23, celebrating the launch of the Melo M10 by the Jordan Brand division of Nike.