According to the U.S. Department of the Treasury, there was a $500 bill in circulation at one time, but it was pulled from distribution on July 14, 1969. In addition to the $500 bill, the $1,000, $5,000 and $10,000 bills were also pulled at that time.
The decision to remove the $500 bill from distribution was made by David M. Kennedy, the Secretary of the Treasury. The bills were primarily used for bank transfer payments, but as more secure transfer methods were introduced, they became obsolete. Investopedia states that the $500 bill featured President William McKinley and was last printed in 1945. The bill is still legal tender as of 2014, but any $500 bills received by the Federal Reserve are destroyed.