The Engineering Department (SED) maintained the City's streets and bridges, designed and oversaw construction of public works projects, provided traffic and transportation planning, and operated the sewer and solid waste utility. The position of City Surveyor was created in 1873 to survey the City, establish boundaries and street grades, and administer condemnation processes. This position was renamed City Engineer in 1890. In 1931 the Engineering Department absorbed part of the Department of Public Utilities and in 1936 it assumed the responsibilities of the Department of Streets and Sewers and the Traffic Department. In 1997, the water, solid waste, drainage, and wastewater utilities from the Engineering and Water departments were merged with the Engineering Services Division of SED and the Customer Service Call Center and Construction Engineering Sections of City Light to form Seattle Public Utilities. The traffic and transportation functions of the Engineering Department were consolidated in the Seattle Transportation Department.

Begun in 1898 and completed over thirty years later, the Denny Hill Regrade leveled one of Seattle's steepest hills, connecting neighborhoods and facilitating traffic flow. Before the regrade, Second Avenue rose 190 feet in the twelve blocks between Pioneer Square and Lenora Avenue, causing traffic and transportation problems in the area. The project began by flattening First Avenue between Pine Street and Denny Way. The sluiced-away dirt was dumped into Elliott Bay or used as filler on downtown streets. The leveling of the hill continued in 1906 and 1907; homeowners who refused to move had the hill sluiced away around them, leaving their houses on islands of dirt.

In 1928, the remaining portion of the hill was leveled using electric steam shovels; the dirt and debris was carried to scows on Elliott Bay by means of large conveyor belts. By the end of the project in 1931, Denny Hill had been flattened and the Denny Regrade neighborhood was born.