Just like Frasers Hill, Bukit Larut and other hill stations in Malaysia, Penang Hill was a favoured destination by the British in the late 1800's, who seek reprieve from the humid tropical climes. One of the earliest hill stations in the country, it is believed that Francis Light himself first trekked up Penang Hill from the grounds of the current Penang Botanical Gardens way back in 1788. Later, some of the British colonials of the time made their way up, using single-passenger sedans carried by at least six coolies. In the mid 19th century, a few bungalows were built by the British for private use. These include the Bel Retiro, Convalescent, Grace Dieu and Fairmont.
The Penang Hill funicular railway (railway operated by cables which counterbalances the ascending and descending train coaches) was completed and began its operations in the mid 1920's. The simple carriages originally used by the railway were replaced with four modern coaches in 1979. One of the old carriages can still be seen today at the Penang Museum, used as the Penang Heritage Trust souvenir kiosk.