The monument was designed by John and Benjamin Green and built by Thomas Pratt of Bishopwearmouth using local gritstone at a cost of around £6000; the money was raised by subscription.

On 28 August 1844, while it was partially complete, its foundation stone was laid by Thomas Dundas, 2nd Earl of Zetland in a Masonic ceremony which drew tens of thousands of spectators.

[31] The land on which the monument stands was eventually passed to the Vane-Tempest-Stewart estate and became the property of Charles Vane, 3rd Marquess of Londonderry, who gifted it as the site of the structure.

[39] At a meeting at the Lambton Arms pub in Chester-le-Street on 19 August 1840, it was decided to form a Provisional Committee to raise funds for a monument to the Earl by subscription.

[41] The following motion was put forward by William Ord MP: That the distinguished services rendered to his country by the late John George Lambton, Earl of Durham, as an honest, able, and patriotic satesman, and as the enlightened and liberal friend to the improvement of the people in morals, education, and scientific acquirements, combined with his unceasing exercise of the most active benevolence, and of the other private virtues which adorned his character, render it the sacred duty of his fellow-countrymen to erect a public monument to perpetuate the memory of his services, his talents, and his virtues, and to act as an incitement to others to follow his bright example.

There were initially disagreements about the site of the monument: proposals included Durham, the Earl's territorial designation; Chester-le-Street, his burial place; Sunderland, where he had trading connections; and Newcastle, due to its size.

[53] In May 1843, the committee met to consider new designs that it had received, and decided to recommend John and Benjamin Green's proposal of a Grecian Doric temple to subscribers.

[46][j] In a letter to subscribers, the Marquess explained his decision to provide the stone: "it has afforded me great satistfaction in a very humble manner to aid in recording my admiration of [the Earl of Durham's] talents and abilities, however I may have differed with him on public or political subjects".

[67][k] The Grand Treasurer placed a phial containing Victorian coins into a cavity in the foundation stone, which was then covered with a brass plate bearing an inscription that dedicated the monument to the Earl of Durham.

[46] The Reverend Robert Green of Newcastle said a prayer and the Freemasons examined the plans of the monument before returning to their pavilion as the band played "God Save the Queen".

The gorgeous insignia of the masonic brethren brilliantly reflected the rays of an almost vertical sun, the various banners fluttering in the gentle breeze, the gay dresses of the ladies, and the vast assemblage of spectators on every side, formed altogether a magnificent spectacle.

[56] A dispute arose at one of these dinners when the vice-chairman, a Liberal solicitor called A. J. Moore, refused to take part in a toast in honour of the Marquess of Londonderry, a Tory.

[74] This ended after a fatal accident:[74] on 5 April (Easter Monday) 1926, Temperley Arthur Scott, a 15-year-old apprentice mason from Fatfield, fell to his death from the top of Penshaw Monument.

[75] A police officer told an inquest at the Primitive Methodist Chapel in Fatfield that it was usual for people to visit the top of the monument on public holidays.

[76] As a result, the Trust agreed to take over Penshaw Monument from John Lambton, 5th Earl of Durham on the condition that covenants be imposed on Cocken Wood, an area of woodland near Finchale Priory.

[74] In 1951 the Sunderland Echo reported that children had unsealed the door to the staircase and climbed the monument to search for pigeons' eggs; the National Trust employed a local builder to reseal it.

[82] In 1959 the National Coal Board repaired the monument after it was damaged by subsistence caused by mining: its northern, western and southern sides had become cracked, and part of the walkway had detached and overhung the interior.

[19] In 1982 a grant from the Countryside Commission allowed the National Trust to purchase 44 acres (18 ha) of land surrounding the monument,[23][80] including much of the south-facing side of Penshaw Hill and the woodland to the north-west.

[85] The National Trust hired the civil engineer Professor John Knapton to carry out a third, more comprehensive survey of the monument to assess whether movement had occurred.

[11] It said it would use the money to provide better access to the monument by replacing old timber steps with new ones made of sandstone and limestone, and improve signage at the site using information from new ground surveys.

[120] The structure has no roof,[3] leading The Illustrated London News to call it hypaethral;[128] however, The Civil Engineer and Architect's Journal considered this adjective inappropriate.

"[50] The Civil Engineer and Architect's Journal termed the presence of pediments despite the absence of a roof a "gross and palpable violation of meaning and common sense".

[124] The decision to make the walls and columns hollow was condemned by The Athenaeum, which called the structure "nearly as much a sham, as if it were composed of cast iron coloured in imitation of stone" and said it "may be intended as characteristic ... of an age which estimates plausible appearances above solid worth".

[132] In his 1887 story "The Flower of Weardale", author William Delisle Hay described the monument: Upon the crest of a bare and ugly eminence that towers above the Wear, there stands a mighty experiment in stone: a Grecian temple, splendid and solemn, with its columns and entablatures, yet blackened and stained by the sooty atmosphere, and looming grandly through the rolling smoke-clouds rising from the collieries down below, over which it lords, and with which it has no fellowship.

Yet may this modern Durham folly on Penshaw Hill emblematize the passage of the centuries, and serve, at any rate, to indicate to us a spot whereby there hangs a legend of elder England.

's current crest, adopted in 1997, features a depiction of Penshaw Monument; according to Bob Murray, the club's chairman at the time, it was included "to acknowledge the depth of support for the team outside the City boundaries".

[137] In 2007 the structure came second in a poll of places which inspired the most pride in residents of the region, behind Durham Cathedral and Castle;[138] in a survey conducted by the advertising company CBS Outdoor, 59% of people from Sunderland said Penshaw Monument was an important landmark.

[140] The National Trust has said that since it reopened the structure's staircase in 2011, "for some making it to the top has become a sort of personal pilgrimage, with many visitors finding it an inspiring and often quite emotional experience".

[142] In his book on Roxy Music, Michael Bracewell describes the experience of approaching the monument: "its immensity drawing nearer, the heroic ideal of the place falls away.

[149] Tony Henderson, also of The Journal, wrote that the lack of roof and interior walls "has been to the advantage of the monument as it allows the dramatic play of light among the columns".