Already a noted theorist and agitator on behalf of religious toleration in England when he turned his attention to American colonization, William Penn (1644–1718) played a central role in the development of liberty of conscience as a fundamental element of legitimate government. This chapter explores the foundations of Penn’s understanding of liberty of conscience and the important role he saw it playing as a foundational social, political, and legal principle. After an overview of Penn’s life and career, the focus turns to Penn’s role in the tolerationist movement during the 1670s in England and the main components of his theory as it developed over the course of his public career; his defense of representative institutions like juries and Parliament; his understanding of fundamental law; and his defense of “civil interest” as a social bond for uniting a religiously-diverse population like England and, later, Pennsylvania. The chapter concludes with a brief examination of the founding documents and early history of Penn’s colony.