Originally from Colombia, he was Bogotá's commissioner of parks and recreation from 1995 to 1998 and oversaw the popularization of the Ciclovía open-streets event.

After moving to Canada in 1998 as Colombia's trade commissioner, he founded the non-profit 8 80 Cities, which promotes a people-centered urban design philosophy.

After Tory's resignation in February 2023, Penalosa announced that he would run again in the subsequent mayoral by-election, but later dropped out of the race in April 2023 and endorsed Olivia Chow.

[2][3][4] His mother Cecilia Londoño was a garden designer and his father, Enrique Peñalosa Camargo was a liberal government official who would serve as Under-Secretary-General of the United Nations at the 1976 UN Habitat Conference on Human Settlement in Vancouver, and later as the country's Permanent Representative to the UN from 1987 to 1990.

[2][3][5] His brother, Enrique Peñalosa, would later become Mayor of Bogotá, and run in the 2014 presidential election as the candidate for the Green Alliance.

[2] The pair left Colombia and spent part of their childhood in the United States because of their father's diplomatic positions.

[4] After earning his MBA from UCLA, Penalosa moved back to Colombia and became the president of a broadcasting company that operated a television station.

[3] After losing, the newly elected Antanas Mockus reached out to Penalosa and appointed him as the capital city's commissioner of parks and recreation [es] in 1995.

The first year, he expanded the event to 15 miles (24 km) and with the help of contacts from his former career as a media executive, attracted approximately 40,000 attendees.

Penalosa said that he was inspired by Frederick Law Olmsted's egalitarian ideals for designing Central Park in New York City.

[5][15] Around 2014, 8 80 Cities, in partnership with the Ontario government, launched the Open Streets project that held events closing roads in favour of pedestrians and recreational uses like cycling and jobbing in Kingston, Toronto, Thunder Bay and Windsor.

[24] Penalosa also supports rent control and improving the RentSafeTo program by introducing colour coded RentSafe signs.

[3] In 2014, the Swedish University of Agricultural Sciences's Faculty of Landscape Architecture, Horticulture and Crop Production awarded Penalosa an honorary doctorate for his work promoting open and green spaces in urban design.

[28] In 2017, readers of Planetizen, an American planning news site, voted Penalosa as the 44th most influential urban designer.