For several years the Holland River and Lake Simcoe provided the only means of transportation. Holland Landing was the northern terminus of Yonge Street. The military route to Georgian Bay prior to, and during the war of 1812, crossed Lake Simcoe to the head of Kempenfelt Bay, then by the Nine Mile Portage to Willow Creek and the Nottawasaga River. The Penetanguishene Military Post was started before the war, however, lacking a suitable overland transport route, passage from York (Toronto) to Lake Huron continued via the Nottawasaga. The Penetanguishene Road replaced this route when the Naval Establishment was opened in 1817.
The route for the road was surveyed in 1808 by Samuel Wilmot. After the British captured Fort Michilimackinac in the War of 1812, the need to supply the captured fort created a need for ships to be built on Lake Huron, which in turn meant that an effective supply route needed to be cut. The decision was made to cut the road in November 1814 by General Gordon Drummond and the road was completed before the following spring.
The war ended before the road was finished. After the war, the surrounding land was purchased from the Chippeway and the road was opened for settlement. It was treated specially by the crown land office in that the strategic value of the route to the naval base led to the road being preferred for military settlers. Large numbers of soldiers who had served in Canada or in other parts throughout the British Empire were settled on the road and in the vicinity of Penetanguishene. Pensioners from Chelsea Hospital could be sent here. Many of the commuted pensioners were reduced to a state of extreme poverty.
From 1824, a connection to this road, built from Holland Landing and completed in 1827 to Kempenfelt Bay, was also called Penetanguishene Road. With its connection to Yonge Street and Middle Crossroad at Crown Hill, the southern portion of Penetanguishene Road became an original part of Highway 11, in 1920.