Penelope is on Farm Road 308 fifteen miles south of Hillsboro in south central Hill County. It was settled in the early 1890s, when the Seley family established the Zee Vee Ranch a half mile from the town's present site. Over the next decade a number of Anglo and Czech families moved into the region. In 1902 the tracks of the International-Great Northern Railroad reached the area. This initiated the purchase of land beside the tracks by the Smith Land Improvement Company, which laid out a townsite and named it for the daughter of the president of the railroad, Penelope Trice. That same year a post office branch opened. Soon thereafter many of the Czech families moved into the town. Residents voted to incorporate in 1913. Over the next twenty years Penelope established itself as an shipping and market center for south central Hill County farmers and ranchers. By the 1920s the town had an estimated population of 400 and twenty businesses, including a bank, three large gins, a lumber company, and the weekly Hill County Review. In addition, a number of churches and a school served area residents. Like its sister communities, Penelope declined as a result of the Great Depression, World War II, and the construction of state and federal highways that made the job opportunities in nearby Dallas and Waco attractive. By the late 1940s Penelope had declined to a population of 240 and eight businesses. These figures remained stable over the next four decades. In 1988 Penelope had 222 residents and two businesses. The population was listed as 210 in 1990 and 211 in 2000.