Penney studied physics at the Imperial College of Science and Technology of the University of London (B.S. 1929, Ph.D. 1931) and at the University of Cambridge (Ph.D. 1935). He taught at the Imperial College from 1936 to 1945. Penney did research for the Ministry of Home Security and the Admiralty during World War II and was principal scientific officer of the department of scientific and industrial research in 1944–45 at the Los Alamos Scientific Laboratory (Manhattan Project), New Mexico, U.S., where he helped develop the American atomic bomb. In 1946 Penney was appointed chief superintendent of armaments research for the British Ministry of Supply, and in this capacity he supervised Britain's development of its own atomic bomb. On Oct. 3, 1952, he directed the successful first test of that weapon in the Monte Bello Islands off Western Australia. He was knighted that same year. Penney was director of atomic-weapons research and development at Aldermaston, Berkshire, from 1953 to 1959, and he was chairman of the U.K. Atomic Energy Authority from 1964 until 1967. In 1967 he was created a life peer.