The government of Peabody built a brand new town hall to replace the one that was built as Danvers was splitting into two towns. The new town hall was dedicated on 22 November 1883. The enormity of the building was often joked about, but when Peabody became a city the huge building was perfect for city hall. The basement of the building held the police station and was equipped with twelve cells.
In 1907 a fire almost destroyed city hall. During the fire there were six prisoners in the basement cells who would have perished if James Gilman and William C. Mahoney of the fire department (with the help of Thomas Grady and Captain McCarthy of the police department) had not saved them. Between 1967 and 1971 the city of Peabody spent $176,920 on renovations and repairs to the city hall.