Timberline Lodge was constructed between 1936 and 1938 as a Works Progress Administration project during the Great Depression. Eighty percent of the WPA's $695,730 total expenditure on building costs paid for labor. Skilled building trade workers received 90 cents an hour; unskilled laborers received 55 cents an hour. Some of the skilled stonemasons on the project were Italian immigrants who had worked on the Historic Columbia River Highway and other roads in Oregon. About 100 construction workers were on site at a given time, and lived at a nearby tent city. Jobs were rotated to provide work to as many of the unemployed as possible.
Materials costs were minimized by the skillful use of recycled materials. Women wove draperies, upholstery and bedspreads, and hooked rugs were made from strips of old Civilian Conservation Corps camp blankets. Discarded cedar utility poles became newel posts with their crowns hand-carved into birds, bears and seals. Fireplace screens were fashioned from tire chains. Andirons and other iron work was forged from old railroad tracks. WPA workers used large timbers and local stone from the site.
"All classes, from the most elementary hand labor, through the various degrees of skill to the technically trained were employed," reported the WPA's Federal Writers' Project. "Pick and shovel wielders, stonecutters, plumbers, carpenters, steam-fitters, painters, wood-carvers, cabinet-makers, metal workers, leather-toolers, seamstresses, weavers, architects, authors, artists, actors, musicians, and landscape planners, each contributed to the project, and each, in his way, was conscious of the ideal toward which all bent their energies."
Federal Art Project contributions to the project were directed by Margery Hoffman Smith, Oregon Arts Project administrator, who created many designs for textiles and rugs. She designed the iconic "snow goose", the 750-pound bronze weather vane above the head house. Smith based the abstract forms incised into the lodge chimney on the art of the local Tenino people. Likely acquainted with William Gray Purcell, a fellow resident of Portland, Smith saw that the Prairie School aesthetic was carried through in tables, chairs, sectional sofas, columns, bedspreads, draperies, lampshades and pendant lighting fixtures. She commissioned murals, paintings and carvings from Oregon's WPA artists.