In 1923 the owner of the Los Angeles Times, Harry Chandler, the banker and railroad owner, General M. H. Sherman, and developer Sidney H. Woodruff formed a real estate syndicate to develop a 500-acre site in the Hollywood Hills called Hollywoodland. They hoped to attract wealthy visitors from the East Coast who wanted a winter holiday home. As part of the marketing campaign, Chandler decided to build a giant illuminated sign on the advice of another developer called H.J. Whitley, who had already used a similar sign for his Whitley Heights development.

The Crescent Sign Company received the $21,000 contract to erect thirteen letters on the southern side of Mount Lee. The company’s manager, Thomas Fisk Goff, designed the sign, which originally read ‘HOLLYWOODLAND’. Each letter was 50 feet (15 metres) high, and 30 feet (9 metres) wide, constructed from telegraph poles, scaffolding poles and metal sheets. These were covered with 4,000 20-watt bulbs, which lit up at night in three parts, first ‘HOLLY’, then ‘WOOD’, and finally ‘LAND’.

On 13th July 1923, the official dedication ceremony for the sign took place. Originally intended to be a temporary structure, the sign soon became a landmark. Nevertheless, it fell into disrepair following the bankruptcy of the development corporation in the early 1940s. At the end of the decade a number of letters had collapsed, but a public outcry prevented the removal of the sign. The city’s Chamber of Commerce repaired the sign; however, they decided to remove the last four letters, so that the sign read ‘HOLLYWOOD’.