“Penny Lane” was released in 1967 as a double A-side single, alongside “Strawberry Fields Forever.” The song was primarily written by Paul McCartney with John Lennon rumoured to have contributed the “four of fish and finger pies” line. Both songs were originally meant to be included on Sgt. Pepper’s Lonely Hearts Club Band, but The Beatles and their management ultimately decided to release them early, since EMI Records was concerned with their “fading popularity” following the infamous “more popular than Jesus” controversy.

George Martin openly said that not including the songs on Sgt. Pepper’s was “the biggest mistake of [his] professional life.” He later explained this in The Beatles Anthology:

The only reason that ‘Strawberry Fields Forever’ and ‘Penny Lane’ didn’t go onto the new album was a feeling that if we issued a single, it shouldn’t go onto an album. That was a crazy idea, and I’m afraid I was partly responsible. It’s nonsense these days, but in those days it was an aspect that we’d try to give the public value for money.

The idea of a double A-side came from me and Brian [Epstein], really. Brian was desperate to recover popularity, and so we wanted to make sure that we had a marvelous seller. He came to me and said, ‘I must have a really great single. What have you got?’ I said, ‘Well, I’ve got three tracks–and two of them are the best tracks they’ve ever made. We could put the two together and make a smashing single.’ We did, and it was a smashing single–but it was also a dreadful mistake.

Penny Lane is a street in Liverpool where McCartney and Lennon used to meet in their childhood. In the song, the narrator (Paul) sits, observes, listens and analyzes the people and their surroundings—everything beneath the surface of their daily lives.

In 2006, Penny Lane was a candidate for renaming because it was originally named after a slave owner. Due to its historical significance in pop culture, however, the name was preserved.