Penela is renown for its Castle of Penela (Castelo de Penela). The castle was built on a hill dominating the area and was a stronghold protecting Coimbra in times of Reconquista. Castle of Penela and the neighboring castle Montemor-o-Velho are both fine examples of defensive structures of that period.  By the beginning of the 20th century the old castle was abandoned and ruined. This was brought to the public opinion and in 1910 the castle was proclaimed a National Monument. Starting in 1940-s the castle underwent a series of restoration works under the supervision of General Direction of the Buildings and National Monuments.

The origins of the name are controversial and are attributed by some authors to ancient Celtic tribes.  According to a local legend, King Alfonso I (Alfonso Henriques) exclaimed to incite his troops storming the stronghold: Coragem! Já estamos com o pé nela! (Courage! We have already set a foot in it!).  A more plausible hypothesis is, however, that penela is a diminutive of penha, a place selected to build a fortress on.

Penela today is a small hilltop town in central Portugal that is midway between Mirando do Corvo, Ansiaand Coimbra.  It has a small market and the area is popular with people wishing to retire there as it is quiet and laid back, surrounded by verdant rolling green hills.