A devout Quaker who had suffered for his beliefs, Penn viewed his colony as a holy experiment, designed to grant asylum to the persecuted under conditions of equality and freedom. In 1681 he sent William Markham as his deputy to establish a government at Uppland and sent instructed commissioners to plot the City of Brotherly Love (Philadelphia), which was laid out a few miles north of the confluence of the Delaware and the Schuylkill rivers.

Penn carefully constructed a constitution, known as the Frame of Government, that gave Pennsylvania the most liberal government in the colonies. Religious freedom was guaranteed to all who believed in God, a humane penal code was adopted, and the emancipation of slaves was encouraged. However, under the representative system that it established, the popular assembly was left in an inferior position in relation to the executive branches controlled by the proprietors. In 1682 Penn arrived at Uppland (renamed Chester). Shortly thereafter he met with the chiefs of the Delaware tribes and a famous treaty was signed that promoted long-lasting goodwill between the Native Americans and the European settlers. After Penn’s death in 1718 proprietary rights were held by his heirs.

By this time Pennsylvania had developed into a dynamic and growing colony, enriched by the continuous immigration of numerous different peoples. The Quakers, English, and Welsh were concentrated in Philadelphia and the eastern counties, where they acquired great commercial and financial power through foreign trade and where they achieved a political dominance which they held until the time of the American Revolution. Philadelphia had by then become the finest city in the nation, a leader in the arts and the professions. The Germans (Pennsylvania Dutch)—largely of the persecuted religious sects of Mennonites (including Amish), Moravians, Lutherans, and Reformed—settled in the farming areas of SE Pennsylvania, where they retained their cohesion and to a considerable extent their language, customs, architecture, and superstitions.