The PATH network's northerly point is the Toronto Coach Terminal at Dundas and Bay Streets, while its southerly point is the Metro Toronto Convention Centre's Convention South Building. Its main axes of walkways generally parallel Yonge Street and Bay Street.
In 1900, the Eaton's department store constructed a tunnel underneath James Street, allowing shoppers to walk between the Eaton's main store at Yonge and Queen streets and the Eaton's Annex located behind the (then) City Hall. It was the first underground pedestrian pathway in Toronto, and is often credited as a historic precursor to the current PATH network. The original Eaton's tunnel is still in use as part of the PATH system, although today it connects the Toronto Eaton Centre to the Bell Trinity Square office complex (the latter of which stands on the site of the former Annex building).
The current PATH system began under city planner Matthew Lawson in the 1960s. Toronto's downtown sidewalks were overcrowded, and new office towers were removing the much-needed small businesses from the streets. Lawson thus convinced several important developers to construct underground malls pledging that they would eventually be linked. The designers of the Toronto-Dominion Centre, the first of Toronto's major urban developments in the 1960s, and completed in 1967, were the first to include underground shopping in their complex, with the possibility of future expansion built in. The city originally helped fund the construction, but with the election of a reform city council this ended. The reformers disliked the underground system despite their support for public transit, cycling, and especially walking as alternatives to the automobile. This opposition was based on the Jane Jacobs notion that an active street life was important to keeping cities and neighbourhoods vital and that therefore consumers should be encouraged to shop on street level stores rather than in malls (whether they be above ground or below); however, the system continued to grow, as developers bowed to their tenants' wishes and connected their buildings to the system. This also converted low-valued basements into some of the most valuable retail space in the country.
The first expansion of the network occurred in the 1970s with the construction and underground connection of the Richmond-Adelaide office tower and the Sheraton Centre hotel complex.
The signage can be hard to find inside some of the various connected buildings. Building owners concerned about losing consumers to neighbouring buildings insisted that the signs not dominate their buildings, or their own signage system. The city relented and the result is the current system. Many complain that the system is hard to navigate.