Owned by Kylie. Considered the youngest of all the Ham-Hams, Penelope is usually never seen without the cover of her yellow blanket (though a few seconds in the opening theme show her blanket coming off, revealing her brown fur). Although she is friendly to everyone, she feels particularly attached to Pashmina. Being innocent and naive, due to her age, she gets into trouble more often than most of the other Ham-Hams.

In season two, she has shown some cross-species affection for Herbert the Pig, a boy by the name of Ethan, and a rabbit at Ethan's school. Unlike the other Ham-Hams, and perhaps because of her young age, Penelope can't say anything more than 'Ookwee!' or 'Ookyoo!' ('Ukyu!' in the original version).