Pen pencils were invented because two-thirds of the lead in an ordinary pencil never gets used, it ends up as pencil sharpenings. Unusually, the mechanical or pen pencil did not result from an updating of an obsolete design or a technological breakthrough as is normally the case. Instead, the pen pencil owes more to a dislike of waste.

The invention of the world's first mechanical pen pencil is generally attributed to American pen maker, A. T. Cross in 1869. The invention, as well as doing away with sharpening, gave adults a grown-up version of the lead pencil to use.

Significantly, the pen pencil did not kill off the traditional wooden pencil for a number of reasons, including cost. What it did do was offer the convenience of the pen with the erasibility of the pencil.

It was, in 1869, also the first major development the lead pencil had undergone since they first appeared in the 16th century. Until then the only fine-tuning to be carried out was the addition of clay to the graphite to produced varying degrees of lead hardness.