The Pennsylvania Railroad Company was the largest railroad in the United States in terms of corporate assets and traffic in the last quarter of the nineteenth century. It was chartered in 1846 to complete an all-rail road across the state, a goal that was accomplished in 1854. In 1857, the company purchased the state's old "Main Line" of canals and railroads and brought the entire line from Philadelphia to Pittsburgh under one management.

Between 1855 and 1874, the Pennsylvania Railroad Company underwent rapid expansion and emerged as one of the two largest railroad systems in the area east of the Mississippi and north of the Ohio. Through stock purchase or lease, it reached Baltimore in 1861, Chicago and Indianapolis in 1869, St. Louis in 1870, Jersey City opposite New York in 1871, and Washington in 1872. Purchase of the Philadelphia, Wilmington & Baltimore Railroad in 1881 brought complete control of the important New York-Washington corridor.

By the end of the nineteenth century, the Pennsylvania Railroad Company was actively exploring the possibilities of extending their line into New York City. At that time, passengers coming to the city from the west had to leave the train with their baggage and take a ferryboat to Manhattan. In order to overcome this disadvantage, the company announced plans for a scheme of tunnels under the Hudson River into a New York station, and from there a connection to the Long Island Railroad. Construction began in 1902 and the tunnels were completed in 1909.