It is located 128 kilometres (80 mi) north of Calgary, east of the Red Deer River.

In 1981, the Village of Penhold incorporated as a town as a result of large population growth in the late 1970s.

During the second world war a Royal Canadian Air Force Station was established near the community.

[8] Attractions in Penhold include a museum, a recreation centre with an indoor arena, a baseball diamond, library, a splash park, a campground, an outdoor ice rink, and a skate park/pump track.

The town is home to three public schools of the Chinook's Edge School Division: Jessie Duncan (Pre-Kindergarten-Grade 3), Penhold Elementary (Grade 4–6), and Penhold Crossing Secondary (Grade 7–12).