Next to Abbey Road, this is probably the most famous thoroughfare mentioned by the Beatles. It is an actual road in Liverpool in the suburb of Mossley Hill. There is a bus stop at the Penny Lane intersection that Paul and John used to catch to take them into the city.
Many of the references in the song are based on ordinary activities in the Penny Lane area that Paul jotted down as they waited for the bus: the local bank, the fire station with the engine being polished up, the barber shop with pictures of the clients on the wall, a nurse selling Remembrance Day poppies, and the bus shelter itself is in the middle of a roundabout, also mentioned specifically in the lyrics