Later in 1892 Ellis and his relatives retired and sold large parcels of land to developers. Over the next years the community grew at a slow pace, but stern wheelers arrived on the lakes allowing access for more goods and services. In 1908 Penticton was incorporated as a district municipality. The fruit trees that were started by Thomas Ellis began to produce and the fruit was packed and shipped internationally. Two years later in 1910, the Canadian Pacific Railway announced that Penticton would be the headquarters for the new Kettle Valley Railway (KVR). This line would connect the coast to the wealth of the Kootenays. This secured Penticton’s economic future. The population quickly grew, as people moved to Penticton for work on the railway. The Canadian Pacific Railway built the Incola Hotel in 1912 across the street from Okanagan Lake. The hotel operated for nearly 70 years before being demolished in May 1980. Today, the Incola site is home to the Lakeshore Towers, a residential complex that consists of three towers, with a total of 225 condo units, an outdoor pool, fitness centers and landscaped grounds. The Lakeshore condominiums continue to be some of the most sought-after executive-style condos Penticton has to offer.
The KVR not only brought newcomers to the area, it also increased the speed and ease of transportation for the soft-fruit industry. In addition, the railway brought tourists to Penticton and put it on the map as a vacation destination - a destination that exists to this day.
At the end of World War II, veterans returned to Penticton and the population and growth continued at a rapid pace. In 1948, Penticton was incorporated as a city – over the 50s and 60s Penticton saw major advances in large infrastructure projects, like the channelization of Okanagan River, a new city hall, and the first major shopping center.